On May 15, TigersPost shared the positive news that the CLARITY Act passed the US Senate Banking Committee with a bipartisan 15-9 vote (markup). However, ahead of the final hurdle—the full Senate vote—an unexpected and powerful political headwind has begun to blow.
- Bombardment of Over 100 Amendments: Led by Senator Elizabeth Warren, hardline Democrats have independently proposed around 40 punitive regulatory measures. With over 100 toxic amendments flooding in, the legislative process has fallen into a severe gridlock.
- *Key Opposing Entities are recorded in “Table#1 Key Opposing Entities”.
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- Pushback from Traditional Banking: The core point of contention is ‘yield-bearing stablecoins.’ Fearing a ‘digital bank run’ where capital massively exits to the blockchain, the American Bankers Association (ABA) is waging a fierce lobbying war, strongly shaking the foundation of the existing compromise.
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- Market Impact: This intense legislative battle has rapidly cooled expectations for the bill’s passage within the year. Institutional investors, who were preparing to enter the market in anticipation of regulatory clarity, are now liquidating positions and taking a wait-and-see approach. This has triggered a short-term price decline and heightened volatility in the Bitcoin market.
In the short term, it is time to maintain a conservative perspective and closely monitor how the political consensus is navigated through the thick fog of Washington.
*Table#1 Key Opposing Entities
| Key Opposing Entities | Core Issues & Amendment Summary | Market & Legislative Impact |
|---|---|---|
| Hardline Democrats (e.g., Elizabeth Warren) |
Proposed over 100 toxic amendments, including approx. 40 punitive regulatory measures. | Legislative process enters severe gridlock; passage within the year becomes highly uncertain. |
| Traditional Banking Sector (e.g., ABA) |
Concerns over massive capital flight (“digital bank run”) if yield-bearing stablecoins are legalized; launching intense lobbying efforts. | Threatens to nullify the previously reached political compromise (Tillis-Alsobrooks). |
| Global Institutional Investors | Risk aversion due to the failure to secure regulatory clarity. Holding off on capital deployment and liquidating existing positions. | Triggers short-term Bitcoin price drops and sharply increases market volatility. |
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