The banking industry has more to gain from the stalled U.S. Digital Asset Market Clarity Act, a bill aimed at regulating digital assets, than the crypto industry, according to Christopher Giancarlo, a former chairman of the country’s Commodity Futures Trading Commission (CFTC).
“The banks need this more than crypto,” Giancarlo told Scott Melker on Sunday’s Wolf Of All Streets podcast. “Their general counsels are telling their boards: You can’t invest billions of dollars to build these digital rails unless you’ve got regulatory certainty. Banks can’t afford regulatory uncertainty.”
The bill has been deadlocked since January, with crypto companies, including Coinbase CEO Brian Armstrong pushing back against proposals from the Senate Banking Committee to ban crypto firms from paying rewards to stablecoin holders.
Stablecoins, tokens whose values are pegged to an external reference such as the dollar, are central to the blockchain-based payments infrastructure being debated in the legislation: Banks see them as a key building block for a new digital system that could move money faster and more efficiently, while crypto firms are already experimenting with their use in global payments.
The banks, however, are worried that allowing stablecoin rewards could trigger a capital flight from their coffers and want a “level playing field,” as JPMorgan CEO Jamie Dimon put it. Trump administration officials have also criticized banks for holding the legislation “hostage.”
Giancarlo warned that if banks resist this, crypto will continue to build anyway, potentially moving offshore.
“If the banks resist this now, it’s not going to go away. It’s just going to go to Europe. It’s going to go to Asia … and then American banks will say, ‘Whoa.’ Our analog, identity-based, message-based system is no longer working anywhere outside,” he said.
Giancarlo put his odds of the bill passing at about 60-40. “We’ve got a lot of issues to resolve before we’re going to get this done,” he said, noting both sides have already missed the White House’s March 1 deadline.
