Crypto Community Celebrates as Senate Banking Committee Passes CLARITY Act

Key Insights

• Crypto community celebrates as CLARITY Act passes Senate Banking Committee with a bipartisan vote
• Experts and stakeholders say the regulation would provide necessary protections and clarity for the industry
• Challenges remain for the CLARITY Act to get the required bipartisan vote in the Senate, as few contentious issues remain unresolved.

The US Senate Banking Committee has passed the CLARITY Act. It’s a move many in the crypto community welcome as a positive development.

According to reports, members of the committee voted 15-9 on the bill. Two Democrat senators, Ruben Gallego and Angel Alsobrooks joined the Republicans.

With the decision, the Crypto Market Structure Bill, is now set for a general vote on the Senate Floor. It will require at least 7 Senate Democrats to pass through the Senate.

Coinbase CEO and Other Stakeholders Praise Milestone Passage

Unsurprisingly, the passage of the legislation has generated a positive reaction from the crypto community. Many of them shared their view about the milestone, including Coinbase CEO Brian Armstrong. He described it as an historic day.

Armstrong highlighted that the bill passed the committee with a bipartisan vote. According to him, this is a major improvement that took countless hours of work by lawmakers and staff to strengthen the legislation.

He added that there has been significant improvement since January across several key areas. That includes stablecoin rewards, DeFi, CeFi, and tokenization. Given that Coinbase opposed the initial version of the proposed legislation, Armstrong believes the opposition yielded positive results.

The tokenization platform Ondo Finance also described the passafe as a landmark moment for tokenization. It noted that the regulation, when passed will clarify rules for tokenized assets and unlock institutional participation.

Even the US Securities and Exchange Commission (SEC) chair, Paul Atkins, congratulated the Banking Committee chair on the milestone. CFTC chair Mike Selig described the vote as a significant milestone. He noted that it moves the US closer to becoming the world’s crypto capital.

Unsurprisingly, the crypto market reacted positively, with Bitcoin climbing up above $81,000 again after gaining almost 3%. The rest of the market also moved up.

Tough Road Ahead for CLARITY Act as Democrat Senators Want Ethics Guardrails

The CLARITY Act enjoys positive sentiment, but its path to law remains long. The proposed legislation still faces a difficult journey ahead. It would need 60 votes on the Senate floor. That means bipartisan support.

However, securing such bipartisan support might still require further inclusions in the proposed legislation. A major demand from Democrats is an ethics clause. This would bar senior government officials from profiting from crypto while in office.

Such a clause could impact President Trump and his family, given their exposure to multiple crypto projects. The White House and Republicans have previously opposed such a clause.

However, a compromise might be needed on ethics language before the bill can pass the Senate. Gallego and Alsobrooks voted Yes in the committee. However, their votes were premised on negotiations that an ethics clause would be included.

Gallego threatened to vote against the bill in the future. He demands ethics guardrails for all elected officials before the next vote. Senator Elizabeth Warren also expressed her strong opposition to the legislation. She warned that the bill could potentially destroy the economy.

The crypto community also expressed concerns about the Blockchain Regulatory Certainty Act (BRCA) provision. This provision sits within Section 301 of the CLARITY Act.

Advocacy group Coin Center insists that officials must not remove these developer protections as a concession. They believe the provision remains crucial for the future of DeFi.

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