Top crypto leaders gathered in Davos, Switzerland, for the World Economic Forum. A panel framed for the discussion on blockchain witnessed the debate featuring Coinbase CEO Brian Armstrong and Bank of France Governor François Villeroy de Galhau over stablecoin yields and Bitcoin.
As the panel discussed various aspects of the economy, most discussion revolved around stablecoin rewards, regulations, their impacts, and the state of U.S. Senate discussions over the CLARITY Act.
Coinbase’s CLARITY Act withdrawal
The Clarity Act was recently delayed just a few hours after Coinbase pulled its support, as the U.S. federal law draws regulatory frameworks for banks to engage with the digital asset economy.
A key point of contention revolved around stablecoins, specifically the debate over whether interest should be paid to holders of tokens pegged to fiat currencies. Armstrong framed the issue as a matter of global competitiveness and consumer rights.
“First, it puts more money in consumers’ pockets. People should be able to earn more on their money,” Armstrong stated. “Second, global competitiveness: China has said its CBDC will pay interest, and offshore stablecoins already exist. If U.S.-regulated stablecoins are banned from paying rewards, offshore competitors flourish.”
Banking committee and Agriculture committee on crypto bill
Senate markup of the US crypto market infrastructure bill, the Clarity Act, was abandoned last week after Coinbase withdrew its support. The Senate Banking Committee is not rushing the crypto bill due to concerns about interest rates on stablecoins and rewarding the stablecoin holders.
Despite the Senate Banking Committee pulling back, the Senate Agriculture Committee has decided to go forward with its market structure bill.
While the committee can still advance the bill to the full Senate, it needs support from both the Democrats and the Banking Committee to move on from the committee stage to the full Senate.
However, there are still fundamental policy differences between Senator John Boozman, the Agriculture Committee’s chairman, and Senator Cory Booker, the chairman of the Banking Committee.
Boozman affirmed this reality in a statement on Wednesday, acknowledging his appreciation for Senator Cory Booker’s work on the bill but emphasizing that “differences remain on fundamental policy issues.”
