The banking industry has more to gain from the stalled US 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 have regulatory certainty. Banks can’t afford regulatory uncertainty.”
The bill has been stalled since January, with crypto companies including Coinbase CEO Brian Armstrong pushing back against proposals by the Senate Banking Committee to ban crypto firms from paying rewards to stablecoin holders.
Stablecoins, tokens whose values are tied to an external reference such as the dollar, are central to the blockchain-based payment infrastructure discussed 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 companies are already experimenting with their use in global payments.
However, banks are concerned 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 law hostage.
Giancarlo warned that if banks resist this, crypto will continue to build anyway and potentially move 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 are going to say, ‘Whew.’ Our analog, identity-based, message-based system no longer works anywhere outside,” he said.
Giancarlo put his odds on the bill passing at about 60-40. “We have a lot of issues to resolve before we get this done,” he said, noting that both sides have already missed the White House’s March 1 deadline.
