Schwartz: "US Crypto Bill Failure Due to 'Entrenched Interests' Taking Care of Themselves" - Banks Attacked

▲ Cryptocurrency regulation, Bitcoin (BTC), Ethereum (ETH)/AI-generated image

David Schwartz, Ripple's Chief Technology Officer (CTO) Emeritus, directly criticized the US Senate's failure to process the US cryptocurrency market structure bill, attributing it to banks protecting their entrenched interests.

According to the cryptocurrency media outlet U.Today on September 17 (local time), CTO Emeritus Schwartz pointed out that the real reason the US Senate blocked the bill's progress, contrary to the superficial justification of protecting local economies, was to safeguard the deposit interests and financial profits of existing traditional banks. He explained that the argument for protecting rural and community banks, put forward by politicians and the financial sector, was merely a pretext. The reality, he stated, was the result of strong lobbying by the banking sector to prevent customer deposits from moving to innovative digital asset services.

The vote on the cloture motion for the bill's debate in the US Senate plenary session failed with 49 votes in favor and 50 against, halting legislative discussions. Failing to cross the 60-vote threshold required for passage, the intense conflict with the banking sector over deposit interest or compensation payments to stablecoin holders was analyzed as the decisive blow to the bill's failure. Local banks have resisted, arguing that the interest payment model of virtual asset platforms threatens the deposit base of local financial institutions.

Schwartz's criticism aligns with the sentiment of Ripple's entire executive team. Earlier, Brad Garlinghouse, Ripple's CEO, also expressed disappointment immediately after the bill's failure but stated that the growth of the technologically superior virtual asset ecosystem would ultimately continue despite the obstruction of existing entrenched interests.

Market experts anticipate that with the delay in the bill's processing, a regulatory environment centered around the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) will continue for the time being. Amid strong resistance from traditional finance, the power struggle both inside and outside Congress over the inclusion of digital assets into the institutional framework is expected to intensify further ahead of the November midterm elections.

[Key Article Summary]

-Ripple's CTO Emeritus Schwartz revealed that the Senate rejected the bill to protect the interests of traditional banks, not to protect local economies.

-The US cryptocurrency market structure bill failed in the US Senate with 49 votes for and 50 against, falling short of the required votes for passage, and legislative procedures were halted.

-Strong lobbying by the banking sector regarding stablecoin interest payments was identified as the key reason for the bill's stagnation.

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