As the US cryptocurrency regulatory landscape remains in flux, a senior former regulator is raising alarms that traditional banks, not crypto firms, are positioned to benefit most from the ongoing uncertainty.
Former Commodity Futures Trading Commission Chairman J. Christopher Giancarlo says that the long-delayed federal crypto legislation is likely to favor established financial institutions over native digital‑asset companies.
In response to this stalling, the former head of the CFTC advised US banks not to wait any longer to embrace cryptocurrencies in their operations, warning that failure to do so will leave the country behind as nations in Europe and Asia overtake it.
“Digital systems will be developed. Then American banks will wonder what happened. Our old-fashioned identity-based system won’t work anywhere outside the US, and we need to modernize. They’ll find themselves lagging,” he said, further stressing that “the banks need this clarity so they can lead in innovation instead of falling behind.”
Several individuals sparked concerns regarding the CLARITY Act passage
Giancarlo’s statement outlines the importance of transparent regulations for financial institutions, intended to guide them before they allocate significant funds to a newly established digital payments system.
Regarding the ongoing dispute among banks, crypto companies, and lawmakers, sources said some banks and lawmakers expressed disapproval of rewarding stablecoin holders. According to them, this act could result in potential capital flight away from traditional banking institutions. On the other hand, crypto companies such as Coinbase, a cryptocurrency exchange, strongly supported these rewards.
Following this discovery, several individuals raised concerns about the fate of the stablecoin reward. In attempts to address this controversy, analysts noted that stablecoins, pegged to the US dollar or other assets, are considered key components of future payment systems.
They further explained that banks see this cryptocurrency as enabling instant, low-cost transactions, while crypto firms have already begun using it for cross-border payments.
In the meantime, debates regarding the CLARITY Act’s passage have also heated up. In Giancarlo’s opinion, the likelihood of this bill being passed is roughly 60–40% at the moment. He made this assumption even though neither side involved had met the White House deadline.
Even so, reports confirmed that the CLARITY Act must pass the Senate floor before US President Donald Trump can sign it into law. In response to this requirement, Trump called for swift congressional action, arguing that the legislation would strengthen America’s leadership in digital assets.
Analysts at JPMorgan have previously projected that the legislation could pass sometime in 2025, though delays in committee hearings have slowed the process. If the CLARITY Act fails to pass, Giancarlo stated that the Chairman of the US Securities and Exchange Commission, Paul Atkins, and the Chair of the Commodity Futures Trading Commission, Mike Selig, would be forced to take the initiative to set their own regulations.
Trump calls for the urgency of passing crucial cryptocurrency regulations
Earlier this month, Trump shared a post on his social media platform, Truth Social, alleging that major US banks are acting as an obstacle to the approval of key cryptocurrency regulations by delaying their passage. According to him, these regulations will enable the country to stay competitive in digital finance.
He further argued that this problem extends beyond mere domestic policy. Afterwards, Trump issued a warning claiming that hesitation in passing key legislation is a recipe for losing competitive advantage, driving both capital and talent overseas, especially toward China.
“The banks are making record profits, and we will not let them weaken our strong Crypto Agenda, which could end up going to China and other nations if we don’t address the Clarity Act,” the president said. His remarks exert pressure on Congress to act as negotiations on crypto market regulation remain deadlocked.
At this moment, Trump specifically focused on the CLARITY Act after crypto supporters expressed confidence that it would provide important regulatory clarity, particularly for the American cryptocurrency market.
Source: https://www.cryptopolitan.com/banks-are-real-winners-in-us-crypto-chaos/
