Regulatory developments in Washington took center stage this week as the US Senate Banking Committee continued its work on the Digital Asset Market CLARITY Act - a crucial piece of legislation for the further development of the stablecoin industry. Originally conceived as a market structure bill, the bill has expanded into a broader crypto regulatory framework that includes #stablecoins, #deficonsumer protection and illegal financial activities. In all draft versions, regulation consistently revolves around control and custody, with obligations linked to who actually exercises decision-making power - rather than whether an activity is designated as centralized or decentralized. This approach forms the basis for dealing with DeFi and stablecoins, where legislators seek to differentiate non-custodial software and payment infrastructure from intermediaries and yield-based financial products. A markup session of the Senate Banking Committee scheduled for January fifteenth has been postponed. With a view to the finalization phase of the Clarity Act, a possible dynamic in #ethereum,
#solana, #xrp and other altcoins.
Crypto assets have historically faced higher regulatory risks outside of #bitcoin historically faced higher regulatory risks, and the CLARITY Act would mitigate these risks by clearly defining which authorities regulate what and what obligations apply to tokens and trading venues. Such codified and permanent regulation can unlock institutional interest through greater legal resilience and more certainty in due diligence. The end result should be more product and service offerings, lower liquidity and an overall reduction in risk perception. We expect this to support the market development of altcoins. (Author: James Butterfill, CoinShares Head of Research)
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