The crypto market rally stalled on Thursday as concerns about the CLARITY Act remained following disagreements with Coinbase, the biggest crypto exchange in the United States, which cited key issues.
Bitcoin price was trading at $96,226 press time, while Ethereum was at $3,310. The CoinMarketCap 20 Index was trading at $203, down a bit from this week’s high of $210.
In a statement, Brian Armstrong, the company’s CEO, identified a few issues in the CLARITY bill. For example, he noted that the bill would essentially ban tokenized equities, interfering with the decentralized finance (DeFi) industry, eroding CFTCs’ authority, which he believes will stifle innovation, and amendments that would kill rewards on stablecoins.
The Senate Banking Committee decided to delay the upcoming CLARITY Act markup as it works on the bill and addresses Coinbase’s concerns. In a statement, Mike Novogratz, the founder of Galaxy Digital, remained optimistic that the Senate would reach an agreement, saying that bills always get tense at the end.
Coinbase and Crypto Exchanges Concerned About Stablecoin Rewards
Coinbase and other American crypto exchanges are largely concerned about the CLARITY Act’s stablecoin rewards, which are limited in the current bill. Most of these limits were imposed as senators faced increased pressure from banks and credit unions, which warned that allowing exchanges to offer rewards on stablecoins would lead to capital flight from their institutions.
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Coinbase has become highly influential in Washington because of its position as the largest crypto exchange in the United States and its lobbying spending.
Data shows that the company spends between $2.5 million and $4 million on lobbying. Coinbase spent more money in the last election cycle and also contributed to Donald Trump’s inauguration committee
Still, traders on Polymarket and Kalshi believe that the Senate will pass the CLARITY Act by the end of the year, with odds remaining above 50%.
The CLARITY Act aims to streamline the regulation of the crypto industry in the United States by separating duties between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). As it is written, the CFTC would have more powers than the SEC, which the crypto community favors.
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