The Clarity Bill is a proposed act in the U.S. that aims to kick start a more comprehensive legislative landscape—on a national level—on the regulation of cryptocurrency, virtual assets and tokens. Among the factors that are stalling the vote; that is, a majority vote across both sides of the aisle, are three-fold. First is the effect it will have on oversight for government officials (including the president) who hold cryptocurrency. Currently, Trump does not have direct holdings of cryptocurrency, but his family has a significant stake—and even management—of cryptocurrency-native firms. Second is the developer’s liability that sanctions platforms and developers that ‘knowingly’ harbor illicit activities; the definition of which is still up for debate. And third is the issue of platforms paying out the rewards on stablecoin balances that the issuer cannot.
Stalling or not, the bill is a major talking point for officials: they cannot endorse, issue or sponsor virtual assets; and this most relevantly affects Trump. The aforementioned family ties to crypto may put more scrutiny (or even sanctions) on Trump—and thus, the definition and scope of the bill is constantly redefined.
This has not stopped the Securities and Exchange commission, a non-partisan, apolitical regulatory financial body, from creating policies in which it can independently enforce. Some argue that the SEC’s move takes a more proactive approach in light of the slow legislative construction in Congress and the Senate. Furthermore, this reflects SEC’s transition from a sanctioning body to that of a law-making one, especially in the realm of cryptocurrency.
In the context of a majority-held Republican congress and senate, if the U.S. Clarity Bill fails to pass, the CEO of Coinbase shares the sentiment that other regulatory bodies such as the SEC and the Commodity Futures Trading Commission (CFTC) will and have been creating the scaffolding for future developments in oversight and regulation.
The CFTC has already created policies and regulations on prediction-market platforms, following the controversial profiteering of a White House teleprompter, who, knowing the speech content to be uttered by Trump, made fraudulent bets on a platform. The SEC also follows with clarifying fundraising procedures for token issuances.
It is therefore the imperative of the regulatory bodies that are outside the scope of political influence to continue adopting new rules—regardless of how the Clarity Bill turns out.
