A senior White House adviser on digital assets is urging Congress to move quickly on approving comprehensive crypto market reform legislation, warning that the current opportunity may not last. According to him, delaying action could ultimately lead to much harsher regulations in the future.
Patrick Witt, Executive Director of the Presidential Council of Advisers for Digital Assets, shared his views publicly on X as lawmakers continue debating the CLARITY Act, a bill aimed at establishing clearer rules for cryptocurrencies across the United States.
“The Question Is No Longer If, but When”
Witt says the debate in Congress has shifted away from whether a comprehensive crypto market structure bill will pass, and toward when it will finally be approved. Without strong federal regulation, a multi-trillion-dollar industry remains stuck in regulatory uncertainty.
As digital assets become increasingly intertwined with the banking system, capital markets, and institutional investment, the risks of regulatory inaction continue to grow. According to Witt, waiting for the “perfect moment” could prove counterproductive.
He notes that major financial regulations are often passed after crises rather than during periods of stability — a pattern the U.S. should avoid repeating in the crypto sector.
Risk of Regulation Driven by Fear
Witt warned that if Congress fails to act now and a major event occurs — such as another market shock or crypto industry collapse — lawmakers would face immense pressure to respond quickly. That could result in punitive legislation similar to the Dodd-Frank Act, which was passed following the 2008 financial crisis.
Such laws, he argues, are often written under political urgency and fear, with limited debate. This could suppress innovation, harm U.S. competitiveness, and weaken the country’s position in the global digital asset economy.
A Rarely Favorable Political Environment
According to Witt, the current political landscape offers a rare alignment: a crypto-friendly president, control of Congress, and regulatory agencies such as the SEC and CFTC that are perceived as more open to working with the industry.
This alignment creates an ideal environment for crafting balanced, effective, and long-term regulatory clarity. However, Witt cautions that waiting too long risks losing this window of opportunity, especially if political leadership changes.
Industry Concerns Slow Legislative Progress
Despite broad agreement on the need for regulation, progress on the bill has stalled in recent weeks due to disagreements over specific provisions rather than the bill’s core objective.
A major setback came when Coinbase, the largest U.S. crypto exchange and a previously strong supporter of the administration, withdrew its backing of the bill. Coinbase raised concerns that certain provisions could negatively impact tokenized equities, DeFi privacy, and how stablecoin issuers provide yield to users.
As a result, a planned Senate Banking Committee hearing was postponed, despite expectations of significant momentum.
Compromise Is Essential, Witt Says
Witt acknowledged the industry’s concerns but emphasized that compromise is necessary to move forward. Passing the bill will require at least 60 votes in the Senate, making bipartisan cooperation unavoidable.
He stressed that lawmakers must avoid letting the pursuit of a perfect solution block progress altogether — and instead act while the political conditions remain favorable.
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