Former CFTC chair: 'The Clarity Act is needed more by banks than by the crypto industry'

Minseung Kang

Summary

Former CFTC chair Christopher Giancarlo said the Digital Asset Market Clarity Act is needed more by the banking sector than by the crypto industry.
He said regulatory uncertainty is preventing banks from making multi-billion-dollar investments in digital financial infrastructure.
Giancarlo warned that if the bill is delayed, the digital asset industry could move to Europe or Asia, and he assessed the odds of passage at 60-40.

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An analysis has emerged suggesting that the 'Digital Asset Market Clarity Act,' now under discussion in the U.S. Congress, is in fact more necessary for traditional finance than for the crypto industry.

According to CoinDesk, a media outlet specializing in crypto, former Commodity Futures Trading Commission (CFTC) Chair Christopher Giancarlo recently appeared on the podcast 'Wolf of All Streets' and said, "Banks need this bill more than the crypto industry does."

He explained that banks are considering massive investment to build new digital payments infrastructure, but regulatory uncertainty is blocking those investments. Giancarlo said, "Banks' legal teams are advising their boards that 'without regulatory certainty, we cannot invest billions of dollars in digital financial infrastructure.'"

The bill is currently deadlocked in Congress due to conflict over whether to allow stablecoin rewards. Some senators and the banking sector argue that crypto firms should be restricted from paying interest or rewards to stablecoin holders. The crypto industry, meanwhile, is pushing back, saying such limits could stifle innovation.

Banks are concerned that if stablecoin rewards are permitted, deposits could move into the crypto market, leading to deposit outflows. JPMorgan CEO Jamie Dimon also underscored this point, saying that a "level playing field" is needed.

Giancarlo warned that if the U.S. Congress fails to pass the bill quickly, the digital asset industry could move overseas. "If banks are trying to stop this now, the industry won't disappear—it will move to Europe or Asia," he said.

While he put the bill's chances of passage at roughly 60-40, he added that "there are still many issues to resolve." The White House's target deadline of March 1 has already passed.