Summary
- The White House’s crypto adviser said Democrats and the banking industry were responsible for the Senate’s failure to advance the CLARITY Act.
- Witt said President Trump had been willing to accept conflict-of-interest provisions related to cryptocurrency.
- Witt said work on a cryptocurrency regulatory framework would be led by federal regulators including the SEC after the bill failed.
The White House has blamed Democrats and the banking industry for the Senate’s failure to move forward with the CLARITY Act, a market-structure bill for digital assets.
CoinDesk reported on September 23 that Patrick Witt, the White House’s crypto adviser, rebutted Democratic claims at a Georgetown University financial-markets event that concerns over President Donald Trump’s crypto business conflicts of interest had blocked the bill. He argued Democrats had turned the matter into a political issue.
The CLARITY Act is intended to establish a regulatory framework for the crypto market. In negotiations, however, provisions limiting crypto-related conflicts of interest for senior public officials emerged as a central sticking point. Democrats and Republicans failed to narrow differences over whether Trump’s crypto business should be covered by those restrictions.
Witt said Trump had been willing to accept two conflict-of-interest provisions during the talks. One would have required the sale of crypto-related assets or their transfer into a blind trust. The other would have allowed state attorneys general to take legal action if the federal government failed to properly enforce ethics rules.
Witt also argued that opposition from the banking industry contributed to the bill’s failure. Large banks, he said, amplified concerns that stablecoin rewards could compete with deposits, and those arguments spread to regional banks, adding strain to the negotiations.
He added that if banks see stablecoins as a threat to the survival of regional lenders, they should again press for related legislation to be passed. In his view, the banking industry’s favorable response to the bill’s collapse contradicts that argument.
Witt, meanwhile, placed greater emphasis on regulators than on additional legislation from Congress later this year. With the Senate failing to advance the CLARITY Act last week, future work on a crypto regulatory framework will be centered on federal agencies including the US Securities and Exchange Commission, he said.
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