- A crypto influencer rejected claims that the proposed bill would unlock trillions in capital or send Bitcoin to $250,000.
- The trader said the legislation could benefit large banks while putting pressure on stablecoin issuers and crypto-native firms.
- The critique warned that stricter rules may shift more control of payments and custody to traditional banks.
A Reddit trader and popular crypto influencer has spoken out against Patrick Witt's claims that the Digital Asset Market Structure and Investor Protection Act would free up "trillions of dollars" of institutional capital that is currently sitting on the sidelines or push Bitcoin up to $250,000 if it passes.
The author named Serenity wrote in an article on X that these kinds of stories don't accurately describe how the bill would have an impact in real life. Instead, they framed the legislation as being better for big banks at the expense of crypto-native companies, stablecoin issuers, and the decentralized finance ecosystem, calling it the “Trojan Horse” for crypto, “paid by banks.”
The blog post framed the bill, along with the GENIUS Act, as potentially limiting yield-bearing stablecoins, forcing crypto platforms to follow bank-like rules for holding crypto, and making it harder to use fiat on- and off-ramps by putting them mostly under bank supervision.
The trader stated that this framework would hurt crypto-native companies that already have trouble getting banking charters or Federal Reserve master accounts. It would also let traditional banks keep control over settlement windows, custody, and payment rails.
The trader added that stricter reserve requirements for stablecoin issuers could force changes in the way the stablecoin market works, which could make it less liquid and limit the use of crypto-backed or algorithmic stablecoins over time.
Crypto-Native Firms Could Lose Ground
The trader further argued that banks will have a competitive edge owing to rules that limit stablecoin yield products and make it harder for non-bank issuers to comply. At the same time, most of the same rules don't apply to bank-issued tokenized deposits.
According to this view, the bill would give the traditional banking system more control over crypto payments and custody. This could slow down innovation and make existing settlement problems worse, like ACH transfers that take too long and low retail deposit yields.
The trader added that while they support stablecoins pegged to the dollar and stronger reserve backing, the broader regulatory structure could make it harder for startups and fintech companies to compete with banks on equal footing and make the crypto market less liquid.
The response comes on the heels of Patrick Witt, Director at President's Council of Advisors for Digital Assets, claiming on Saturday that if the CLARITY Act passes, trillions worth of institutional money could sweep into the crypto industry.
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