A top White House advisor has cautioned cryptocurrency industry players that obstructing the current compromise regarding the Clarity Act could leave the sector vulnerable. The industry, which has just recovered from the hostility of the previous SEC administration, could get a much harsher treatment if the Democrats win the text election.
Warning to holdouts
Witt took to social media to express his mounting frustration with the ongoing delays, specifically calling out those attempting to block the bill over specific regulatory concessions.
A future administration might adopt a more hostile stance toward critical industry pillars such as stablecoin rewards, decentralized finance (DeFi), developer protections.
“I wonder how a future Democrat administration will handle stablecoin rewards. And developer protections. And DeFi. And the line between digital commodities and securities,” he said.
This is a rather substantial departure from Witt’s previously optimistic public stance. On March 25, for instance, the advisor dismissed concerns over the bill’s friction as uninformed fear, uncertainty and doubt (FUD).
Earlier in the week, he had even praised Senators Thom Tillis and Angela Alsobrooks for bridging the partisan divide.
However, he seemingly cannot hide his frustration anymore.
Coinbase rejecting compromise
According to recent reports, Coinbase has once again declined to support the updated legislative draft.
The largest U.S. cryptocurrency exchange opposes the provisions that would prevent crypto platforms from paying yield on stablecoin holdings.
The new bipartisan proposal makes it incredibly difficult for exchanges to calculate and distribute rewards.
According to a recent analysis from 10x Research, the latest CLARITY proposal effectively ends the narrative of using stablecoins as a savings product.
Traditional banks have lobbied against stablecoin yields, arguing that they would drain deposits from traditional institutions.
Some lawmakers are currently working on a possible solution. Senator Tim Scott reaffirmed ongoing outreach with Coinbase to secure industry buy-in on the final language.
