US Treasury Secretary Bessent Issues Ultimatum: Urges Swift Passage of CLARITY Act to Stabilize Crypto Market

In response to the recent seismic shifts rocking the cryptocurrency market, U.S. Treasury Secretary Scott Bessent has issued a forceful ultimatum to Congress. Bessent is demanding accelerated legislative action, specifically the passage of the “Digital Asset Market Clarity Act” (CLARITY Act) this spring, to be signed into law by President Trump, thereby restoring crucial confidence in the digital asset landscape.

A Call for Legislative Urgency Amidst Market Turmoil

Speaking to CNBC, Secretary Bessent underscored the critical need for this regulatory framework to assuage investor anxieties following a period of significant market downturn. He articulated his belief that a clear regulatory structure is the antidote to current market jitters.

“Bringing some ‘clarity’ to the CLARITY Act would inject a powerful dose of reassurance into the market.”

Bessent’s message to lawmakers was unequivocal: expedite the process to ensure the bill reaches the President’s desk before the end of spring.

Resistance to Regulation Blamed for Market Instability

The Treasury Secretary posited that a portion of the recent cryptocurrency market collapse, which saw Bitcoin plummet over 29% in the past month, was avoidable. He attributed this instability, in part, to what he described as “resistance to regulation” from certain segments of the industry, a stance that has only exacerbated market uncertainty.

Bipartisan Consensus Meets Industry Obstruction

Despite Washington’s often-contentious political climate, Bessent revealed a rare bipartisan alignment on cryptocurrency regulation. However, this consensus faces internal challenges.

“There is indeed a group of Democrats willing to work with Republicans to promote this market structure bill. But unfortunately, a number of cryptocurrency companies are obstructing it… This doesn’t seem to be good for the cryptocurrency industry.”

Bessent has not shied away from strong rhetoric, labeling opposing firms as “stubborn elements.” He issued a stark warning: if these entities are unwilling to operate within the U.S. regulatory framework, they are free to relocate their operations to other nations.

The Coinbase Conundrum: A Key Point of Contention

At the heart of this regulatory battle is Coinbase, the largest cryptocurrency exchange in the United States. Coinbase famously rescinded its support for the CLARITY Act, primarily due to a specific clause within the bill that prohibits companies from offering “stablecoin interest or yield” to retail investors.

Brian Armstrong, CEO of Coinbase, made his position clear, stating that “bad law is worse than no law.” He argued that maintaining the status quo would be preferable to accepting a flawed bill that could stifle innovation within the burgeoning digital asset space.

Political Headwinds and a Looming Deadline

Beyond industry pushback, the political landscape presents a significant hurdle for the CLARITY Act. Bessent cautioned that the current bipartisan unity is fragile. Should Democrats reclaim control of the House of Representatives in the upcoming November midterm elections, the entire legislative negotiation could collapse, leaving the market in continued limbo.

Reflecting on past regulatory pressures, Bessent alluded to previous administrations whose policies nearly “extinguished” certain sectors of the crypto industry. His implicit message to current operators is to seize this comparatively favorable legislative window, lest they face more stringent and less accommodating regulations in the future.