The draft Clarity Act, which is being discussed in the US Senate and foresees significant changes for the crypto industry, has sparked controversy among leading figures in the industry. Coinbase, one of the largest cryptocurrency exchanges operating in the USA, conveyed its dissatisfaction with the final version of the bill to various senators. However, the company has not officially declared its complete opposition to the bill.
The New Regulation Caused Different Reactions in the Industry
The draft law presented to the crypto industry was shared with industry representatives on Monday and with stakeholders in the banking sector on Tuesday. Reactions from the crypto world varied. While some representatives from the industry expressed their dissatisfaction with the changes, some others evaluated the regulations in the draft positively. While it was reported that Coinbase was the party that expressed the most concern in this process, none of the industry players were given a copy of the draft text; The text has not yet been put into circulation.
During the meetings, it was brought up that there are still unresolved issues, especially in terms of services related to stablecoins. Participants pointed out that the possible effects of the proposal could create wider restrictions on the sector than expected.
The bill includes some regulatory bodies preparing new rules on what steps to take on issues such as awards. However, some industry representatives argue that such regulations should be made with objective criteria. In its current form, regulations are envisaged that limit the diversity of reward programs and restrict the rewards associated with fixedcoin transactions. This could seriously impact apps like credit card rewards programs.
Answers and Effects on Markets
Coinbase CEO Brian Armstrong stands out as an important actor on behalf of the industry in these negotiations that have been going on for months. Armstrong had previously expressed strong opposition to a regulation regarding stablecoin returns and played a role in canceling a planned Senate hearing. Coinbase may face significant risk of revenue loss, particularly from the tightening of stablecoin reward programs.
At the industry meeting held at the beginning of the week, it was reported that Coinbase had a difference of opinion with other crypto companies regarding the draft law. While some firms felt it would be costly to give up certain rewards, others argued that the Clarity Act would put crypto in a more solid position in the US financial system.
It seems likely that the new text of the bill will be shared again at the end of this week or the beginning of next week. However, it is expected that the sections that were discussed for a long time during the preparation of the law will be largely preserved.
Banking sector representatives did not publish an official evaluation of the bill.
Developments regarding the Clarity Act caused volatility in the publicly traded shares of leading US fixedcoin issuers Circle and Coinbase. Circle’s stock value fell 20 percent on Tuesday, then partially recovered on Wednesday. The announcement of rival fixedcoin Tether that it would be opened to inspection also had an impact on Circle’s share movements.
Despite the negative reactions to the final version of the bill, White House crypto advisor Patrick Witt criticized some public comments for lack of information and shared the following:
“Everything will be fine.” He stated that there was no need for concerns.
