- The CLARITY Act risks centralizing crypto control with large financial institutions by assuming activity must pass through intermediaries, according to Gnosis co-founder Dr. Friederike Ernst.
- The bill is stalled in Congress due to disputes between the crypto and banking industries over stablecoin yield, prompting Coinbase to withdraw its support.
- While clarifying SEC and CFTC jurisdiction and protecting self-custody, the bill may fail to safeguard open blockchain rails and DeFi protocols, according to critics.
Dr. Friederike Ernst, co-founder of the Gnosis blockchain protocol, warns that the US Digital Asset Market Structure Clarity Act could consolidate crypto control with large financial institutions. Her critique, provided to Cointelegraph, centers on provisions assuming activity must flow through centralized intermediaries.
“Blockchain’s real breakthrough was not just a new financial infrastructure. It was the ability for users themselves to become owners of the networks they rely on,” she said. Consequently, pushing activity back through institutions risks turning users into customers rather than stakeholders in the technology.
However, Ernst acknowledged the bill does clarify regulatory jurisdiction between the SEC and CFTC. It also protects peer-to-peer transactions and self-custody, providing some foundational certainty for the industry.
The highly anticipated CLARITY Act remains stalled in Congress over a key disagreement. Banks and crypto firms are clashing on whether stablecoin issuers can share interest with holders, a core feature for many.
This impasse led Coinbase to withdraw its support for the legislation in January. CEO Brian Armstrong stated they would rather have no bill than a bad one, citing concerns it would weaken DeFi and prohibit stablecoin yield.
Meanwhile, US Senator Bernie Moreno expressed optimism the bill will pass by April and reach President Trump’s desk. Alex Thorn, head of research at Galaxy, noted that if it doesn’t pass by April 2026, its chances for the year become extremely low.
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