CLARITY Act Divides Wall Street, Crypto Over Trump Ban

A new draft of the CLARITY Act has created a split between major financial firms and parts of the crypto industry. Senate Republicans added language that would bar the president and certain federal officials from issuing or sponsoring digital assets. Goldman Sachs’ chief executive urged lawmakers to move the bill forward to create a federal market structure for digital assets, while Cardano founder Charles Hoskinson publicly supported Sen. Elizabeth Warren’s push to prevent President Donald Trump from directly participating in crypto markets.

Goldman CEO David Solomon described himself as “very supportive” of advancing the legislation to establish clearer rules and allow innovation to develop. That position differs from a coalition of banking trade groups, which urged tighter limits on provisions they say could allow interest-like payments on stablecoins. The American Bankers Association, Bank Policy Institute, Consumer Bankers Association, Financial Services Forum, Independent Community Bankers of America and National Bankers Association warned that permitting such rewards could draw deposits away from banks and reduce funding for small-business, mortgage and agricultural lending. The groups wrote that they appreciate lawmakers’ willingness to consider targeted changes that would strengthen the prohibition on interest-like payments for holding stablecoins.

Some large banks are exploring tokenized deposits, stablecoins and blockchain settlement as they integrate digital assets into traditional markets. JPMorgan Chase’s chief executive has raised concerns about parts of the CLARITY draft, creating an internal divide among leading banks over how far to accept stablecoin rewards and other new market features. Solomon’s support indicates Goldman is prepared to accept unresolved disputes on certain provisions to secure a broader federal framework.

Hoskinson criticized the politicization of the debate, writing that Democrats had increasingly framed the issue as “Crypto = Trump = Corruption,” which he said made bipartisan progress harder. He supported Warren’s narrow argument that the president should not act as a market participant, calling the office “the ultimate insider” whose policies and actions can influence markets.

Other industry figures urged passage while acknowledging flaws in the text. Andreessen Horowitz partner Chris Dixon said, “No law is perfect, and the CLARITY Act is no different,” and argued federal rules would provide protections currently missing from U.S. crypto markets. Coinbase president Emilie Choi told senators the bill should appeal across political views, saying, “Whether you like crypto, hate crypto, or don’t care, you should want this bill passed.” Republican Sen. Bill Hagerty expressed similar urgency, stating, “the time for CLARITY is now.”

The bill’s path in the Senate faces obstacles. Seven Democratic senators who took part in negotiations-Angela Alsobrooks, Cory Booker, Catherine Cortez Masto, Ruben Gallego, John Hickenlooper, Mark Warner and Raphael Warnock-said the draft still falls short on elected-official ethics, consumer protection, illicit finance, conflicts of interest and market integrity. CLARITY requires 60 votes to advance, so Republican sponsors need some Democratic support.

Senate timing has also narrowed the window for action. Senate leadership does not expect to finish the legislation before the August recess, removing a near-term deadline negotiators had used to force compromises. A missed vote before the break, one senator warned, would reduce the bill’s chances as the calendar fills with election-year priorities.

At issue are rules for stablecoin rewards, who can offer them, and broader trading, settlement and consumer protections. Banks say exchanges and intermediaries could compete with deposit accounts by offering rewards on stablecoin balances under different rules. Crypto companies argue broad restrictions would limit competition and favor incumbents. Negotiators must reconcile banking and crypto priorities, address ethics concerns, and secure time and votes on the Senate floor for any final agreement.