The Position of Banks/Traditional Financial Lobbying Groups (53+ organizations including the American Bankers Association exerting joint pressure): If stablecoins can pay interest, they will absorb bank deposits like “shadow banks” (estimated to be a loss of $1-1.5 trillion in deposits), threatening financial stability and the survival of community banks.
Crypto industry perspective (Coinbase, DeFi projects, most native communities): This is tantamount to banks eliminating competitors and stifling DeFi's core competitiveness; the US is damaging the global status of the dollar; Coinbase calls this "the biggest regulatory capture by bank protectionism ever." This is the main trigger for Coinbase CEO Brian Armstrong's public reversal and the delay of the markup. 2. Substantive Restrictions on Tokenized Equities / RWA (Tokenized Equities/Real-World Assets) The essence of the controversy: The draft is accused of containing a de facto ban or extremely high barriers, severely restricting the tokenization of traditional stocks, equities, bonds, and other assets on the blockchain. Industry opposition: This directly hits the biggest growth point in the RWA sector in the future, hindering blockchain from bringing capital markets onto the chain; Coinbase claims this will cause the US to fall behind in the race for next-generation financial infrastructure. Supporters/Regulators: Concerned about circumventing securities laws, increasing systemic risk and investor protection loopholes. 3. DeFi Regulatory Intensity and Privacy Erosion The essence of the controversy: Imposing strict AML/KYC and reporting obligations on decentralized protocols, potentially even requiring protocol parties to provide "unlimited access to users' financial records." Critics (DeFi fundamentalists, Coinbase, etc.): This destroys the core values of DeFi (privacy, self-custody, permissionless), forcing decentralized protocols into "regulated entities," and many protocols may directly withdraw from the US. The other side (Some Democratic lawmakers, former SEC officials): The current draft provides insufficient exemptions for DeFi/software developers and weak investor protection, potentially leading to a "next FTX"-style fraud. 4. Imbalance in Power Distribution Between SEC and CFTC The essence of the controversy: The draft is accused of significantly weakening the CFTC's authority over "digital goods," instead allowing the SEC to dominate more areas (especially the early "ancillary asset" stage). Mainstream view in the crypto industry: The CFTC is more friendly and better suited for innovation; the SEC's approach is tantamount to continuing to regulate crypto as securities, effectively stifling it. Regulatory conservatives: Concerned that CFTC regulation is too lenient and investor protection is insufficient. 5. Other secondary but still sharp disagreements Former SEC chief accountant and others warn that the draft is "seriously inadequate," with weak disclosure, auditing, and enforcement tools that could lead to systemic fraud. Ethics/Conflict of Interest Clause: Democrats wanted to include a clause prohibiting crypto interests of the Trump family and officials, which Republicans strongly opposed, viewing it as a "partisan attack." State Law Preemption: Whether federal uniform rules fully cover state laws sparked discontent among state regulators. The CLARITY Act, originally the biggest hope for ending regulatory uncertainty, has now become a polarized conflict at the last minute due to the fundamental conflict between banking interests and native crypto innovation: "better no bill than a bad one." Coinbase's tough stance led to a direct delay for markup, making it difficult for the bill to pass quickly in the short term, but negotiations continue—the final version will likely require significant concessions on stablecoin yield and DeFi freedom to get back on track. **Summary of Core Viewpoints of Supporters and Opponents** **Supporters (Those still actively pushing for or willing to continue negotiating amendments)** These groups mostly believe that "clear rules are better than a regulatory vacuum/enforcement-style regulation," and are willing to accept certain compromises in exchange for overall legitimacy and institutional funding. **Ripple (Brad Garlinghouse):** This is "a significant step forward," clear rules are better than chaos; Coinbase's fierce opposition surprised them, but the rest of the industry is still "constructively participating"; the problem can be solved through the markup process. **Circle (USDC issuer):** The bill provides an overall workable framework, which will help the legitimate large-scale adoption of stablecoins; willing to continue negotiations. **Kraken:** Supports advancing the bill, believing that a clear division of labor between the SEC and CFTC is beneficial to the industry in the long run. Top venture capital firms like a16z (Andreessen Horowitz) and Paradigm: They hope to see institutional compliance pathways opened up, facilitating the entry of large funds; they believe that while the current draft has flaws, it is heading in the right direction. Industry associations/think tanks like Coin Center and Digital Chamber: The bill can end the nightmare of "enforcement-style regulation," providing predictability, which is essential for the US to maintain its global competitiveness in the crypto space. Some Republican lawmakers (such as Senate Banking Committee Chairman Tim Scott and Cynthia Lummis): The bill replaces uncertainty, provides clear rules, strengthens anti-fraud measures, and brings businesses back to the US. In short, the supporters' stance is: "We'd rather have clear rules with flaws than a perpetual gray area plus enforcement-style regulation; we're willing to accept some concessions in exchange for legitimacy and institutional funding." The opponents (strongly opposed to the current version, even preferring no legislation at all) prioritize protecting the core values of cryptography (privacy, self-custody, decentralization, freedom of innovation, and equal competition), believing the current draft is "worse than the status quo." Coinbase (Brian Armstrong) is the loudest and most influential voice of opposition, with core reasons for opposition (directly quoted from their X post): **Essentially banning tokenized equities (a major blow to tokenized stocks/RWA)** **Imposing prohibitive clauses on DeFi is tantamount to giving the government "unlimited access to users' financial records," destroying privacy rights** **Weakening the CFTC's authority, making it subordinate to the SEC, stifling innovation** **Banning/strictly limiting passive yields (yield/rewards) of stablecoins allows banks to eliminate competitors, damaging the global status of the US dollar** **Attitude:** Preferring no legislation to bad legislation; however, they remain open to negotiations, hoping for a better version. **A large number of DeFi fundamentalists, Bitcoin maximalists, and self-custodian advocates:** The bill is a "wolf in sheep's clothing," superficially providing clear rules but actually tailored for banking interests, sacrificing decentralization and user privacy in exchange for compliance. **Some privacy coin/heavy decentralized project communities:** They worry that stricter retroactive requirements will lead to delisting or an existential crisis. **A one-sentence summary of the opposition's position:** "The current version is more dangerous than a regulatory vacuum; it will turn crypto into 'regulated securities' controlled by banks, sacrificing core freedom and innovation; without good rules, we'll maintain the status quo and continue the fight." **Conclusion:** The CLARITY Act is no longer a united front of "crypto vs. regulation." Instead, it has evolved into a debate within the crypto community between "decentralization idealists" and "institutional compliance pragmatists." Bank lobbying groups, on the other hand, play a key role in disrupting this balance behind the scenes.
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