Ripple CEO Brad Garlinghouse has called on the US Senate to pass the CLARITY Act, a piece of legislation concerning cryptocurrency. Garlinghouse described the bill's final draft as a "serious policy deal" resulting from "real, substantive trades" made by policymakers, rather than a mere compromise. He emphasized that "perfect can’t be the enemy of good" and that the compromises made were significant.
US Treasury Secretary Scott Bessent also voiced support for the CLARITY Act, linking it to the broader GENIUS Act and stating its necessity for America to "win the global race for new technology." Bessent highlighted the Trump administration's focus on both digital technology and community banks, asserting that the CLARITY Act aims to ensure the stablecoin infrastructure is built in the US and that the community bank sector thrives. He noted that the bill grants the Treasury secretary additional authority to protect community banks if stablecoins lead to deposit flight.
The latest draft of the CLARITY Act reportedly includes ethics language, protections for developers, and a "circuit breaker" mechanism for the Treasury to intervene if payment stablecoins negatively impact community banks. Garlinghouse urged senators not to view the bill as a "settling for" outcome but as a deal they should "stand behind," reminding them that "the world is watching and voters are watching."
However, Senate Democrats are reportedly preparing a counterproposal to the CLARITY Act, indicating dissatisfaction with the current text. This development follows a meeting between Democrats and Senate Minority Leader Chuck Schumer, leading to a drop in the odds of the CLARITY Act passing. Despite this, Bernstein anticipates that some Democrats may support the bill to meet the 60-vote requirement, potentially lifting sentiment in the crypto market. The firm predicts upside momentum for assets like Bitcoin, Ethereum, and XRP, but warns that a failed vote, especially if coupled with hawkish Federal Reserve commentary, could trigger a significant downturn in crypto markets and related stocks.