TechFlow News, April 23: According to The Block, Jaret Seiberg, Managing Director of the Washington Research Group at investment bank TD Cowen, stated that stablecoin yield issues are not the sole obstacle to the passage of the Clarity Act. He identified the following five additional hurdles:
1. A severe shortage of Commodity Futures Trading Commission (CFTC) commissioners—currently only Chairman Michael Selig remains. The process to appoint new commissioners could take several months, yet the bill must complete its review by the end of July;
2. Complex regulatory challenges surrounding prediction markets, including concerns about insider trading and potential conflicts of interest involving the Trump family; related amendments may prompt Democrats to withdraw their support;
3. Ongoing controversy surrounding World Liberty Financial—a cryptocurrency project affiliated with the Trump family—which is increasing political resistance from Democrats toward supporting the bill;
4. Reports indicate Iran is reportedly discussing requiring vessels transiting the Strait of Hormuz to pay tolls in cryptocurrency, potentially triggering contentious anti-money laundering (AML) amendment proposals that could act as a “poison pill” for the bill;
5. The risk that the Credit Card Competition Act could be attached to the Clarity Act, potentially derailing the entire bill.
Regarding stablecoin yield issues, Senator Thom Tillis indicated that the Senate Banking Committee will not vote on the bill until as early as May. TD Cowen maintains its assessment that the probability of the bill passing this year remains approximately one-third, while Galaxy Digital estimates the likelihood at roughly 50%.
