Revised CLARITY Act Exposes Divisions Across Wall Street, Washington, and Crypto

The revised CLARITY Act is exposing unusual divisions across Wall Street, Washington and the crypto industry as lawmakers struggle to build support for a Senate vote.

Senate Republicans this week released a new draft that would bar the president and other federal officials from issuing or sponsoring digital assets.

The changes have drawn sharply different reactions from influential figures across finance and crypto.

Goldman Sachs Chief Executive David Solomon reportedly urged Congress to advance the sweeping market-structure bill despite disagreements within the banking industry over provisions that could intensify competition for deposits.

Cardano founder Charles Hoskinson, meanwhile, has sided with Sen. Elizabeth Warren on one of the bill’s most contentious political issues, arguing that President Donald Trump should stay out of crypto markets while in office.

The contrasting positions underline the complicated coalition surrounding CLARITY as senators seek compromises on stablecoin rewards, government ethics and financial regulation, with the bill’s path to passage narrowing.

Goldman Sachs breaks with banking opposition

In a recent interview, Solomon took a different position from major banking groups that want lawmakers to tighten the bill before it advances.

The banking executive told Politico he was “very supportive” of moving the legislation forward to establish a market structure and allow innovation to develop. While acknowledging that the bill remained imperfect, he said creating a level playing field and greater market stability should take priority.

That stance contrasts with a coalition of banking groups that said the latest Senate draft still threatens the deposits that support lending across the US.

The American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, Independent Community Bankers of America and National Bankers Association said lawmakers should strengthen restrictions on interest-like payments for holding stablecoins.

The groups warned that allowing such rewards could draw deposits away from banks and reduce funding available for small-business, mortgage and agricultural lending.

“We appreciate [lawmakers] willingness to consider targeted changes that would strengthen the prohibition on interest-like payments for holding stablecoins,” the groups said, adding that the payments could “siphon away the bank deposits” used to finance lending.

The dispute has become one of the main fault lines between banks and crypto companies as stablecoins expand beyond trading into payments, settlement and other financial services.

Banks argue that exchanges and other intermediaries could effectively compete with deposit accounts by offering rewards on stablecoin balances while operating under a different regulatory framework. Crypto companies have pushed back, saying broader restrictions would curb competition and protect incumbent lenders.

JPMorgan Chase Chief Executive Jamie Dimon has also raised concerns about the framework, putting Solomon on the opposite side of an increasingly public debate within Wall Street over how far Congress should go in restricting stablecoin rewards.

The disagreement comes even as large financial institutions deepen their involvement in blockchain-based finance. Goldman and other banks have explored tokenized deposits, stablecoins and blockchain settlement as digital assets become more closely integrated with traditional markets.

Solomon’s support suggests Goldman Sachs is willing to tolerate unresolved disputes over those provisions to secure a broader federal framework for crypto markets.

Hoskinson backs Warren as crypto industry pushes for passage

The political divide is becoming more complicated inside crypto, where support for CLARITY is increasingly colliding with concerns over Trump’s personal involvement in the industry.

In an X post, Hoskinson blamed the Trump administration’s handling of crypto policy for making the legislation more partisan.

Hoskinson said Democrats had increasingly framed the issue as “Crypto = Trump = Corruption,” making it harder to build bipartisan support for legislation. He said:

“No progress can be made if crypto is partisan.”

He also backed Warren’s argument that Trump’s position creates a conflict with direct participation in financial markets. Over the past year, Warren has consistently criticized Trump's crypto ventures, while arguing that the current bill will “supercharge Trump’s crypto corruption.”

In view of this, Hoskinson posited that “the president shouldn’t be a market participant” because “he is the ultimate insider” whose policies and actions influence the broader industry.

The comments put Hoskinson alongside one of crypto’s most persistent critics on a narrow but consequential issue while stopping well short of opposing broader market-structure legislation.

That distinction is important because much of the crypto industry continues to press Congress to pass CLARITY despite acknowledging shortcomings in the latest draft.

Chris Dixon, who leads crypto investing at Andreessen Horowitz, said the legislation would establish protections that are currently missing from US crypto markets and argued that lawmakers should not allow disagreements over individual provisions to derail the broader framework.

“No law is perfect, and the CLARITY Act is no different,” Dixon said, adding that the latest version reflected months of bipartisan negotiations and significant compromises by the industry.

He argued that passage would give the US clearer rules for digital assets and help prevent financial innovation from moving to jurisdictions with more developed regulatory frameworks.

The contrast illustrates the increasingly narrow line the industry is trying to hold.

Crypto firms broadly want Congress to establish federal rules governing digital-asset markets. Still, Hoskinson’s comments show that support for the legislation does not necessarily translate into acceptance of Trump’s personal crypto interests.

CLARITY Act path narrows

Those divisions are emerging as Democratic opposition and a shrinking Senate calendar make CLARITY’s path to passage increasingly difficult.

Seven Democratic senators who have participated in negotiations said the updated CLARITY Act still falls short despite the addition of the new ethics restrictions.

Sens. Angela Alsobrooks, Cory Booker, Catherine Cortez Masto, Ruben Gallego, John Hickenlooper, Mark Warner and Raphael Warnock said provisions covering elected-official ethics, consumer protection, illicit finance, conflicts of interest and market integrity still need to be strengthened.

Their position is significant because Republicans cannot pass the market-structure legislation on their own. CLARITY needs 60 votes to advance in the Senate, requiring support from Democrats who remain willing to negotiate but are not prepared to back the current text.

At the same time, the remaining window for the bill has also narrowed.

Senate Majority Leader John Thune reportedly said he does not expect the Senate to complete the legislation before lawmakers leave for their August recess, undercutting a deadline that negotiators had increasingly used to force compromises on the remaining disputes.

The likely delay removes some of that immediate pressure while pushing the bill deeper into an election-year calendar already crowded with other legislative priorities.

Sen. John Kennedy had warned that failure to secure a positive vote before the August break would shift the odds against supporters, reflecting concerns that reaching an agreement could become harder once senators return.

That leaves negotiators facing two related problems: finding enough Democratic votes for the legislation and finding enough Senate floor time to act on any agreement they reach.

CLARITY Act supporters are nevertheless continuing to press for passage.

Sen. Bill Hagerty, one of the Republican lawmakers backing the legislation, said “the time for CLARITY is now,” arguing that the US needs clearer digital-asset rules to protect consumers while keeping investment and jobs in the country.

Crypto companies are also making a similar case. Coinbase President Emilie Choi said the broader regulatory framework should appeal even to lawmakers and voters who have little enthusiasm for the industry because it would establish federal oversight and consumer protections that are currently lacking.

She said: