The recently proposed U.S. CLARITY Act, which aims to establish a regulatory framework for digital assets, faces criticism for potentially consolidating control with large financial institutions. According to industry experts, the bill’s structure risks undermining the core ownership model of blockchain by pushing activity through centralized intermediaries. The legislation is currently stalled in Congress due to disputes over stablecoin yields and concerns from the crypto industry.
Dr. Friederike Ernst, co-founder of the Gnosis blockchain protocol, stated that the CLARITY Act’s regulatory assumptions threaten to give large financial institutions control. She argued the regulations risk consolidating crypto infrastructure in the hands of a few entrenched players by presuming activity must pass through centralized intermediaries.
Ernst explained that blockchain’s breakthrough was enabling users to become network owners, not just customers. “If activity is pushed back through institutional intermediaries, users risk becoming customers renting access to financial technology once again rather than stakeholders in it,” she said. The bill does provide jurisdictional clarity between the SEC and CFTC while protecting peer-to-peer transactions and self-custody.
However, Ernst warned that failing to protect open, permissionless rails could import legacy financial system failures into crypto. The legislation’s progress is currently halted by disagreements between the crypto and banking industries, primarily over whether stablecoin issuers can share interest with holders.
In January, Coinbase withdrew its support for the bill, citing provisions that would weaken DeFi and prohibit stablecoin yield. “We’d rather have no bill than a bad bill,” Coinbase CEO Brian Armstrong stated in an X post. US Senator Bernie Moreno remains optimistic the bill could pass by April and reach President Donald Trump’s desk.
Alex Thorn, head of research at Galaxy, noted that if the bill does not pass by April 2026, its chances become “extremely low.” Thorn suggested in an X post that stablecoin rewards may not be the only hurdle, with potential issues around DeFi and developer protections also unresolved.
