Ripple CEO Brad Garlinghouse has expressed cautious optimism that a landmark deal on the Clarity Act, a comprehensive crypto market structure bill, is within reach despite a "not pretty" negotiation process. Speaking to Fox Business, Garlinghouse emphasized the legislation's critical importance for the United States to become the "crypto capital of the world." He revealed that while the timeline has slipped, discussions involving crypto executives, U.S. banking representatives, and regulators at the White House are advancing, with a target for the bill to be ready by the end of May.
A key sticking point in the negotiations has been the treatment of stablecoins, specifically whether crypto firms should be allowed to pay yield to customers holding them. Banking chiefs, including JPMorgan Chase CEO Jamie Dimon, have clashed with the industry, warning of deposit base erosion and arguing that crypto companies offering such rewards should be regulated like banks. In a significant development, President Donald Trump has sided with the crypto industry, urging the passage of the legislation and warning banks not to "hold the vital legislation hostage." He stated on Truth Social that the powerful crypto agenda would otherwise go to countries like China.
Garlinghouse argued that codifying the Clarity Act into law would ultimately benefit traditional financial institutions, encouraging them to "lean in more" to the crypto industry. He highlighted stablecoins as the entry point for traditional finance, citing a "Chat GPT moment of crypto" where major firms like Visa, Mastercard, Amazon, and BlackRock are accelerating their stablecoin ventures following last year's Genius Act.
In parallel, Senator Cynthia Lummis, a key supporter of the bill, revealed that recent changes to the Clarity Act include robust protections for the DeFi (Decentralized Finance) sector. She stated that the amendments aim to make DeFi "the safest it has ever been" by introducing critical safeguards. The proposed approach focuses regulation on entities that control user funds or have non-neutral software infrastructure, while reportedly excluding developers who do not control user funds from stringent money transfer rules and KYC requirements. This is designed to maintain autonomy for self-custody while implementing necessary anti-fraud measures.
The bill's progress has been delayed since January, partly due to Coinbase pulling its support over the stablecoin yield issue. The goal for passage has now shifted to April. Despite the delays, proponents believe the Clarity Act could be a major catalyst for restoring market confidence and providing much-needed regulatory clarity.
