CLARITY Act Stablecoin Debate In A 'Good Place' – Draft 'Very Close' To Completion, Says JPMorgan

• JPMorgan said the latest proposals on stablecoin rewards could strike a balance that is acceptable to both crypto firms and traditional financial institutions.
• It said only a two or three issues remain to be resolved, down from nearly a dozen, as negotiations near a breakthrough. 
• The remaining questions mostly center around decentralized finance oversight and token classification, according to the bank. 

Digital Asset Market Clarity Act (CLARITY) is reportedly “very close” to being completed and the debate around whether or not companies like Coinbase (COIN) and PayPal (PYPL) can offer stablecoin rewards is in a “good place.”

According to a CoinDesk report, JPMorgan said only a two or three issues remain to be resolved, down from nearly a dozen, as negotiations near a breakthrough. The remaining questions mostly center around decentralized finance (DeFi) oversight and token classification, according to the bank. 

COIN’s stock fell more than 3% in morning trade on Wednesday amid broader weakness in the market, while PYPL’s stock edged 0.7% lower. Retail sentiment on Stocktwits around Coinbase trended in ‘bullish’ territory over the pat day, while sentiment around PayPal stayed in ‘extremely bullish’ territory. Coinbase and Paypal offer rewards on stablecoins, but do not issue the stablecoins themselves. 

Circle (CRCL), issuer of the USDC stablecoin, also trended lower in morning trade. CRCL’s stock fell 2.5%, with retail sentiment in rising to ‘neutral’ from ‘bearish’ territory over the past day. 

Stablecoin Yield Debate Nears Resolution

JPMorgan said the latest proposals on stablecoin rewards could strike a balance that is acceptable to both crypto firms and traditional financial institutions, according to the report.

The issue of stablecoin yield has been the main divisive point between the banks and cryptocurrency leaders, since the bill stalled in January. It drew pushback from banks on grounds of a potential deposit flight, while cryptocurrency executives argued that it would discourage adoption.

It remains uncertain whether the bill pass before the Senate recess. The CLARITY Act is intended to establish a comprehensive framework for digital asset regulation in the U.S. and clarify how oversight will be divided between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

Read also: Arthur Hayes Calls Market A ‘No Trade Zone’ Amid US-Iran Tensions – Maps Out Four War Outcomes For Bitcoin

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