Coinbase CEO Brian Armstrong has publicly endorsed the CLARITY Act, a significant reversal following months of opposition from his company due to concerns over stablecoin yield restrictions. The endorsement, made on April 9, removes a major obstacle to the legislation, which previously faced disruption from Coinbase. The CLARITY Act is now poised for a Senate vote, with Armstrong’s support aligning with backing from high-profile figures such as U.S. Treasury Secretary Scott Bessent, SEC Chairman Paul Atkins, and CFTC Chair Michael Selig, all of whom expressed their approval on the same day.
The renewed push for the bill comes just before the Senate reconvenes on April 13, providing a critical two-week window for the Banking Committee to advance the legislation ahead of the midterm elections. Should the bill pass, it would ensure the permanent classification of XRP as a commodity, granting legal clarity for institutions looking to engage in cross-border payments via Ripple’s platform.
Armstrong’s previous opposition stemmed from fears that the bill’s provisions would limit Coinbase’s USDC rewards program, which generates approximately $1.35 billion annually by offering a competitive yield on stablecoin holdings. Early drafts of the bill proposed a total ban on passive stablecoin yield, which Armstrong argued would harm consumers while benefiting banking profits. His stance forced the Senate committee to cancel a markup session in January.
However, a compromise reached in late March modified the provisions to allow activity-based rewards tied to platform usage. Despite initially rejecting the updated language, Armstrong’s position shifted following a report from the White House Council of Economic Advisers, which estimated that a complete prohibition on passive stablecoin yields would cost consumers $800 million annually, without providing substantial protection for bank deposits. His endorsement on April 9 included gratitude toward Bessent for his advocacy, signaling a readiness to move forward.
The broader implications of the CLARITY Act were framed by Bessent in his Wall Street Journal op-ed, where he highlighted the national security risks associated with the absence of clear regulatory frameworks. Countries like Singapore and Abu Dhabi have attracted blockchain developers and crypto firms by establishing such frameworks, prompting concern over the U.S.’s competitiveness in the digital asset space.
Both the SEC and CFTC have prepared a joint initiative, Project Crypto, ready to be activated if Congress passes the CLARITY Act. Selig echoed the sentiment, emphasizing the need for legislative protection against potential future regulatory reversals. Even David Sacks, the former crypto czar who now lacks an official role in the administration following his tenure’s conclusion, joined the call to rally support for the bill.
As the fate of the CLARITY Act hangs in the balance, it also influences market dynamics surrounding XRP. Should the legislation fail to progress, XRP risks losing its last significant catalyst, which could lead to price declines, testing the $1 mark. The forthcoming weeks will be critical for XRP holders, not only in relation to the bill’s outcome but also due to broader geopolitical events impacting market sentiment.
