The proposed CLARITY Act in the U.S. Senate aims to end the regulatory ambiguity in the crypto market, but it raises sharp divisions within the sector, especially between traditional banks and decentralized finance.
🧾 What is the CLARITY Act?
The Digital Asset Market Clarity Act of 2025 is the first serious attempt to establish a clear regulatory framework for the digital asset market in the United States, and it includes:
• Define authorities:
– The SEC oversees offerings and aspects of securities.
– The CFTC regulates trading and digital commodities.
• Repealing SAB 121 to facilitate banks' holding of digital currencies.
• Limited protection for non-custodial DeFi developers.
Simply put: replacing lawsuits with written rules.
❌ Why does Coinbase oppose the current version?
After reviewing the Senate draft, Coinbase withdrew its support for the following reasons:
1. Restricting tokenized assets (RWAs) and forcing them into traditional frameworks that are ill-suited for peer-to-peer trading.
2. Tighten oversight on DeFi through KYC requirements and reports that undermine privacy.
3. Expanding the SEC's influence at the expense of the CFTC, reinstating uncertainty for developers.
4. Restrict stablecoin yields and prevent negative interest on holdings.
⚔️ The crux of the dispute: banks vs. DeFi
• Banks offer depositors 0.1–0.5%.
• Treasury-backed stablecoins yield 4–5%.
• Passing this yield to users could withdraw 25–30% of bank deposits (about $6 trillion).
• Therefore, banks pushed to limit this competition.
The result? A draft that clarifies the rules but shrinks gains and imposes restrictions that favor banks.
✅ What counts for the law?
Despite the flaws, the law offers positive points:
• Clear definition of regulatory jurisdictions.
• A legal pathway for cryptocurrencies to exit the securities classification.
• Protection for open-source developers.
• A formal registration framework for platforms.
This clarity is important for the massive institutional capital waiting for the legal framework to enter.
👀 Where does the sector stand?
• The Coinbase platform rejects a law that favors banks.
• Other entities like a16z, Kraken, and Circle see that imperfect clarity is better than regulatory paralysis.
• Consensus: A law will eventually be passed.
❓ The real question: Will it serve to protect bank deposits or build a competitive financial system on-chain?
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