"US CLARITY Act could hand control of digital assets to large financial institutions"

Concerns have been raised that the CLARITY Act, a US bill to establish a market structure for digital assets, could reshape the virtual asset (cryptocurrency) market around major financial institutions.

According to Cointelegraph on the 15th (local time), Friederike Ernst, co-founder of Gnosis, said, "The current regulatory framework of the CLARITY Act is designed so that digital asset activity takes place through centralized intermediaries, creating a risk that market control will be concentrated in large financial institutions."

She added, "The core innovation of blockchain is not simply a new financial infrastructure, but that users can become participants and owners of the network," and warned that "if activity shifts back to a financial institution-centered structure, users could be reduced from stakeholders in the network to mere customers."

At the same time, she viewed as a positive that the CLARITY Act clarifies regulatory jurisdiction over digital assets between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and protects peer-to-peer transactions and self-custody.

However, Ernst cautioned that "if decentralized finance (DeFi) and open blockchain infrastructure are not adequately protected, the same vulnerabilities as the existing financial system could be repeated in the digital asset market."

The CLARITY Act is currently facing delayed discussion in the US Congress due to a dispute over whether stablecoin interest payments should be allowed. Banks and the digital asset industry differ on whether stablecoin issuers should be permitted to pay interest to holders.