Lawmakers faced pressure to finalize crypto rules as stablecoin debates and Senate delays held back institutional investment.
- White House official Patrick Witt said trillions of dollars in institutional capital were waiting to enter the crypto market, but investors are awaiting clear regulations before deploying funds.
- Lawmakers debated limits on stablecoin rewards, with recent House meetings signaling movement toward a possible compromise.
- Witt said the bill should be passed before the midterm elections due in November.
As the CLARITY Act continues to be in a policy overhang, White House official and digital asset advisor Patrick Witt said on Friday that trillions of dollars in institutional capital remain on the sidelines waiting to enter crypto.
On Friday, Witt shared in an interview with Yahoo Finance that large investors are ready to enter the market once there is legal certainty around digital assets in the United States. “There are trillions of dollars in institutional capital on the sidelines waiting to get into this space,” adding, “let's not let any moss grow here’ urging a swift passage of the Digital Asset Market Clarity Act of 2025 (CLARITY Act)
“Regulatory clarity is the unlock,” he wrote after the interview on X. He also urged lawmakers to pass the CLARITY Act before the upcoming midterm elections due in November, which he thinks could slow the approval process. “We’re definitely on the clock,” Witt said, reiterating the limited time available in Congress to move the bill forward before other priorities and midterm politics take focus.
A key point of debate around the CLARITY Act is whether crypto companies should be allowed to offer rewards or yield on stablecoins, which many within the banking lobby believe could hurt the traditional financial structure.
Stablecoin Dispute
The issue was discussed in closed-door House meetings in early February, where lawmakers, Senate Banking Committee staff, crypto firms, and major banks sought a compromise.
Crypto journalist Eleanor Terrett reported on Wednesday about the closed-door House meetings and shared a draft titled “Yield and Interest Prohibition Principles.” The proposal would bar payment stablecoin issuers from offering incentives tied to holding or using a stablecoin and require regulators to enforce the rule and study its impact on deposits and credit access.
Ripple Chief Legal Officer Stuart Alderoty described Wednesday’s session as “productive” and wrote, “compromise is in the air,” urging lawmakers to act “while the window is still open,” in tune with what Witt says.
CLARITY Act Progress And Legislative Timeline
The senior White House executive added that an executive order halted federal sales of seized crypto to allow a full review of government holdings as part of a potential digital asset reserve. Passing the legislation remains “a priority for the president,” he added.
Incidentally, US Treasury Secretary Scott Bessent also reiterated the importance of Congress passing the CLARITY Act and pushing it for the presidential signature by spring. Bessent said, “I think it’s important to get this Clarity Bill done as soon as possible and on the President’s desk this spring.” Bessent believes that doing so would be “good for the overall crypto community.”
Read also: Coinbase’s Armstrong Says Banning USDC Rewards Would Boost Profits, But Hurt US Customers
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