In a research report on Monday, TD Cowen Managing Director Jaret Seiberg stated that he is "increasingly pessimistic" about the prospects of the Clarity Act, a crypto market structure bill, believing that the probability of the bill advancing in the Senate and passing the House is only one in three. The bill is currently stalled in the US Senate, with Congress entering its two-week Easter recess. Seiberg pointed out that the recent compromise on stablecoin yields pushed by Senators Thom Tillis and Angela Alsobrooks is "insufficient" to advance the bill. This compromise prohibits offering yields on idle stablecoin balances but allows for activity-based rewards when using stablecoins. Seiberg believes this compromise may not satisfy either side: for crypto platforms, it will discourage investors from using stablecoins for liquidity management; for banks, it will incentivize crypto platforms to promote stablecoins for daily payments, threatening core deposit businesses. Seiberg stated that the bill is most likely to advance before Congress's August recess in late July, at which point the pressure of the recess may force senators to reach a compromise. He also pointed out that even senators who were previously optimistic are lowering their expectations, with Senator Mark Warner reducing the probability of the bill's passage from 80% to 50% to 60%.
Catherine
