U.S. Banks Are the Real Losers If the CLARITY Act Dies, Says “Crypto Dad”

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U.S. Banks Are the Real Losers If the CLARITY Act Dies, Says “Crypto Dad”

Key Takeaways

  • Former CFTC Chair Giancarlo warns U.S. banks face serious disadvantage if the CLARITY Act stalls
  • Banks and crypto firms are deadlocked over stablecoin yield – the bill’s biggest sticking point
  • Trump has sided with the crypto industry, accusing banks of blocking consumer rewards
  • Analysts expect bill passage by mid-2026 could trigger a significant market rally

During an interview on The Wolf of All Streets podcast, Giancarlo explained that the cryptocurrency industry will continue to develop regardless of whether or not Washington provides support. He believes a more significant issue is that major financial institutions, such as Bank of America, are currently stalled because they need clear rules and regulations before they can fully participate.

Giancarlo cautioned that banks need clear rules to operate effectively, and without the CLARITY Act, U.S. banks could be at a disadvantage compared to international competitors who are rapidly adopting digital payment technologies.

The Sticking Point: Who Gets the Interest?

The CLARITY Act, a bill aiming to resolve a long-standing disagreement between the SEC and CFTC about which agency oversees crypto markets, would officially give the CFTC primary oversight of immediate crypto transactions (spot markets). While this aspect isn’t widely debated, the bill is currently stalled due to disagreements about how to regulate stablecoins.

The main debate centers around whether cryptocurrency companies should be permitted to offer interest on stablecoins. Banks oppose this, fearing that customers will move their money from traditional savings accounts to earn higher returns on these digital equivalents. They’ve warned of a significant outflow of deposits, a risk they’ve termed “deposit flight,” and their strong opposition even derailed a potential agreement reached at the White House in early March 2026.

President Trump hasn’t supported the banks’ concerns. He’s publicly favored the crypto industry, suggesting banks are trying to stifle competition and prevent people from earning money on their investments.

Regulation Built for the Last Era

Giancarlo believes the current dispute is part of a larger problem: regulators often try to fit new technologies into old rules instead of creating rules that actually fit how innovation happens. He argues that a flexible, principles-based approach is the only way to effectively regulate such a rapidly changing industry.

As a researcher, I’ve been looking into why people are adopting crypto, and it’s clear that age plays a significant role. It’s not just about a new technology attracting attention; younger generations are actively moving *away* from traditional financial systems. These systems weren’t designed with their needs in mind, and, according to Giancarlo, this trend is likely to continue no matter what happens with new legislation.

The Market Is Watching

This isn’t just theoretical – the cryptocurrency market is currently worth around $2.34 trillion (as of March 2026). Even with challenges like tensions in the Middle East and unclear rules in the US government, Bitcoin has remained stable, trading between $68,000 and $70,000.

Over a hundred exchange-traded funds (ETFs) tied to cryptocurrencies are expected to launch before the end of the year, but this depends on regulators resolving some outstanding issues.

As a researcher following the crypto market, I’m seeing increasing optimism around potential regulatory clarity. JPMorgan analysts suggest a bill approval around mid-2026 could really boost the market, potentially triggering a rally in the second half of the year. Gemini is even predicting the CLARITY Act will pass this year, which would put an end to the current practice of regulating through enforcement actions. And Grayscale views 2026 as a key turning point – the moment when crypto truly comes into its own as a recognized asset class, separate from the more speculative tech investments.

It remains to be seen if Congress will act quickly enough to establish that viewpoint. Currently, the industry is developing, while banks are holding back. This difference in pace could be the very issue Giancarlo is concerned about.



This article is for informational purposes only and shouldn’t be considered financial, investment, or trading advice. Coindoo.com doesn’t support or suggest any particular investment or cryptocurrency. It’s essential to do your own research and talk to a qualified financial advisor before making any investment choices.

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2026-03-09 11:50