Cardano founder Charles Hoskinson has warned about passing the CLARITY Act, outlining reasons why the crypto bill doesn’t benefit the industry. He also noted that the bill could open the door for the SEC to shut down new crypto projects in the future.
Cardano Founder Reiterates Warning Over CLARITY Act
In an X broadcast, Hoskinson described the crypto bill as “horrific,” claiming that it makes every crypto asset a security by default. He further remarked that it creates attack vectors and bureaucratic red tape, which enables the SEC to destroy all future American crypto projects.
The Cardano founder also noted that the CLARITY Act lacks protections for DeFi, prediction markets, and even stablecoins, since the bill bans yield on stablecoin balances. “This is not a good bill,” Hoskinson declared.
He added that the rulemaking could become weaponized against the crypto industry and that the bill doesn’t address the core issues in the crypto space. Notably, industry leaders such as Ripple CEO Brad Garlinghouse have opined that the lack of perfection should not hinder progress, and there have also been discussions that Congress could amend the bill later.
However, the Cardano founder indicated that there should be no rush to pass the CLARITY Act, especially given that discussions of a later amendment show the crypto bill misses key issues. Hoskinson had previously criticized the Ripple CEO for supporting the bill despite its flaws. He also cited policy gaps in the crypto bill at the time.
Hoskinson’s statement comes as the bank and crypto industry continue talks on the stablecoin yield provision in the CLARITY Act. The banks are pushing for a broad ban on stablecoin rewards, while the crypto industry has agreed to a ban on stablecoin balances only.
JPMorgan CEO Calls For Level Playing Field
In a CNBC interview, JPMorgan CEO Jamie Dimon called for a level playing field between banks and crypto firms regarding whether crypto firms should be able to distribute stablecoin rewards. He noted that rewards are the same as interest and that if crypto firms are going to pay interest on holding balances, they should be classified as banks and subject to the same regulations they face.
He outlined how banks face stricter regulations, and so, the only way to level the playing field with crypto exchanges such as Coinbase is by product. Dimon suggested that his bank’s push for greater restrictions on stablecoin rewards in the CLARITY Act is not due to fear of competition.
The JPMorgan CEO highlighted that his bank is one of the biggest users of blockchain and that it has created a deposit coin. “We’re moving a lot of data now using blockchain. “So, we’re in favor of competition, but it’s got to be fair and balanced, a level playing field. It’s not, it can’t be completely skewed,” he said.
As banks and crypto continue to negotiate on the stablecoin rewards provision, the Senate Banking Committee is eyeing a markup of the CLARITY Act this month. As CoinGape reported, the markup could happen by the end of this month.
Optimism that the CLARITY Act will pass this year remains high. Polymarket data shows there is a 76% chance that U.S. President Donald Trump will sign the crypto bill into law this year.
