Wall Street Giants Back CLARITY Act as Crypto Regulation Vote Delayed

Five of the largest U.S. asset managers and banks publicly endorsed the Digital Asset Market Clarity Act in the final week of July. BlackRock, Fidelity, Franklin Templeton, Goldman Sachs, and SoFi each issued statements supporting the legislation. The endorsements came as the Senate postponed the vote, pushing the bill’s next floor consideration to the fall session after the November midterm elections.

The CLARITY Act would draw a line between SEC and CFTC jurisdiction over digital assets. It introduces a “decentralization threshold” – a set of criteria a token must meet to qualify as a commodity rather than a security. The criteria include concentration of token holdings, dependence on a development team, and the degree of control held by the project’s organizers.

A second major provision would restrict the ability of stablecoin issuers to pay yields to holders. JPMorgan Chase pushed for that restriction, arguing that stablecoin yields create an unfair advantage over bank deposits. The bank’s lobbying effort positions the bill as a battleground between traditional finance and crypto-native products.

A third section requires government officials to disclose their crypto holdings. The clause was added as a transparency measure. Critics say it could lay the groundwork for a broader government registry of digital asset addresses and balances.

Goldman Sachs CEO David Solomon said the bill would “bring market stability” and allow banks to offer crypto services without the risk of regulatory crackdown. The Goldman CEO backs CLARITY Act as banks fight stablecoin rewards article details the bank’s lobbying push.

Opponents argue the bill is designed to favor large incumbents at the expense of decentralized projects. The compliance burden – registration forms, audits, ongoing disclosure requirements – would be manageable for firms with deep legal teams. Small teams operating permissionless protocols would find it prohibitive. “The CLARITY Act would turn permissionless innovation into a licensed activity,” said one crypto policy advocate who asked not to be named. “That’s the opposite of what made this industry work.”

The stablecoin yield provision is the most direct example of the bill’s protectionist character, opponents say. Stablecoins that pass through yield from Treasury bills or other low-risk instruments can offer returns that retail banks cannot match. Banks capture the interest spread as profit. The CLARITY Act, if it restricts those yields, would effectively ban a product that competes with traditional deposit accounts. “The stablecoin yield provision is designed to protect the bank deposit base, not to protect consumers,” said a former SEC official now working at a crypto investment firm.

The decentralization test is another flashpoint. The bill’s criteria for proving a token is sufficiently decentralized require a subjective assessment by regulators. “That forces protocols to centralize control to meet the government’s definition of decentralization,” the former SEC official said. “It undermines the very property that makes them valuable: the ability to operate without a central authority.”

The Senate is expected to return to the bill after the August recess. The midterm elections could shift the political calculus. If the bill does not pass before the end of the year, the next Congress may take up a different version. Some lawmakers warned that delaying the bill could cede the U.S. lead in crypto to other jurisdictions. The CLARITY Act delay risks US crypto lead, Haridopolos warns article notes that Florida Senator Haridopolos argued the delay gives the EU and Singapore an opening.

Wall Street’s endorsements make the stakes clear. The largest financial institutions are betting on a version of crypto regulation that benefits their own business models. The question is whether the next framework accommodates decentralized finance or locks in the current hierarchy of intermediaries.