Expectations for Clarity Act Passage Surge on Stablecoin Compromise, Coinbase Endorses

▲ Stablecoin ©Da-sol Ko

As the stablecoin interest controversy finds a compromise, expectations for the passage of the U.S. cryptocurrency market structure bill are rapidly rising.

According to DL News on May 5 (local time), the U.S. Senate agreed on a compromise that restricts stablecoin interest payments but allows activity-based rewards. Consequently, the probability of the U.S. cryptocurrency market structure bill, the Clarity Act, passing surged from 46% to 64% according to the decentralized prediction market Myriad.

The core of this agreement is a structure that prohibits the payment of returns "economically identical or functionally similar" to bank deposit interest, while allowing rewards based on actual activities such as transactions, remittances, payments, and DeFi liquidity provision. This supplements the 'interest ban' provision that was controversial in the existing stablecoin regulation bill, GENIUS.

Market reactions were mixed. Crypto investor Nic Carter commented that "banks have won," while Van Buren Capital's Scott Johnson analyzed it as "not perfect, but acceptable." However, the most notable reaction came from Coinbase CEO Brian Armstrong's statement, "Bring it to a vote," which was effectively interpreted as a signal of support for the bill's advancement.

Notably, Armstrong had previously withdrawn his support and halted the bill's deliberation earlier this year, protesting stablecoin regulations. This shift in support has increased the likelihood of the Senate Banking Committee resuming a vote, with industry discussions even mentioning the possibility of a vote in May. Summer Mersinger, CEO of the Blockchain Association, also commented that "this agreement is a significant turning point in legislative progress."

However, variables remain until the bill's passage. The Senate version needs to be reconciled with the bill already passed by the House, and there's a possibility of legislative delays once election schedules intensify. Nevertheless, as expectations for resolving regulatory uncertainty grow, the market appears to be gradually shifting towards betting on policy momentum.

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