Galaxy Digital CEO Michael Novogratz has publicly detailed the primary obstacle to passing comprehensive cryptocurrency market structure legislation in the United States, identifying bank lobbying as the central force behind the deadlock. In an interview on CNBC's 'Squawk Box', Novogratz expressed optimism that a bill could become law within weeks, citing serious bipartisan commitment from both Democratic and Republican senators.
The core conflict, according to Novogratz, revolves around stablecoins and their potential to disrupt traditional banking economics. He explained that banks currently pay savers minimal interest—between one and eleven basis points—while earning roughly 3.5% to 4% by placing those deposits at the Federal Reserve. This spread is a key profit center. Stablecoins that offer interest-bearing returns could incentivize consumers to move deposits out of traditional bank accounts, directly challenging this revenue model and weakening bank margins.
Novogratz stated that banks have mounted a "highly organized and influential" lobbying effort in Washington, raising concerns directly with lawmakers about deposit flight and credit availability. He framed the public debate over regulatory turf between the SEC and CFTC as secondary to this fundamental economic battle over who controls consumer money.
Concurrently, Novogratz highlighted Galaxy Digital's own expansion, announcing regulatory approval to increase the capacity of its Helios data center in Texas to over 1.6 gigawatts. Originally acquired as a Bitcoin mining facility in 2022, Novogratz described Helios as transforming into a massive energy hub driven by demand for artificial intelligence computing power.
Despite the lobbying headwinds, Novogratz urged for the bill's passage, arguing, "We must pass this law; even if it’s not perfect, it’s essential for the growth of the sector."
