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Clarity Act passage odds below 50%, GSR legal chief warns
The GSR legal chief's assessment signals that unresolved debates over stablecoin interest payments and ethical questions could stall crypto legislation, leaving issuers in limbo.
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Joshua Riezman, legal chief at crypto market maker GSR, now sees less than a 50% chance that the Clarity Act will pass the current Senate session. The assessment, delivered in a recent market update, marks a sharp downgrade from earlier expectations and puts a concrete number on the legislative risk facing stablecoin issuers and digital asset platforms.
The Clarity Act is a proposed framework that would define how digital assets, including stablecoins, are regulated in the United States. Its passage would create a federal licensing regime for stablecoin issuers, establish reserve and redemption requirements, and clarify the jurisdictional lines between the SEC and CFTC. Without it, the industry continues to operate under a patchwork of state money transmitter licenses and enforcement-driven guidance.
Stablecoin Yield and Ethics as Sticking Points
Riezman attributed the dimming odds to two specific, unresolved debates: stablecoin yield and ethics concerns. Each issue has the potential to fracture the bipartisan coalition needed to move the bill through a closely divided Senate.
The yield question turns on whether stablecoin issuers should be permitted to pay interest to holders. Allowing yield could reclassify stablecoins as securities, triggering registration, disclosure, and custody requirements that most issuers are not equipped to handle. The industry has largely avoided yield-bearing stablecoins to stay clear of securities laws. Some lawmakers, however, view yield as a consumer benefit that should be permitted, creating a direct conflict with the securities-law framework. That tension has not been resolved in the current draft, and Riezman indicated it remains a major obstacle.