White House: CLARITY Act Would Trigger Major Banks’ Entry into Crypto Markets
A senior White House official, David Sacks (head of AI and cryptocurrency policy), said major banks are likely to enter cryptocurrency markets if Congress passes the Cryptocurrency Market Structure Act (CLARITY Act). Introduced in 2024, the CLARITY Act aims to resolve regulatory uncertainty by defining asset classification (security vs. commodity), custody standards, market conduct protections, and interagency coordination between the SEC and CFTC. Analysts and industry surveys (Bank Policy Institute: 87% of major bank CEOs cited regulatory ambiguity in 2024) indicate unclear rules have been the primary barrier to bank participation. Major banks have already built technical infrastructure—examples include JPMorgan’s JPM Coin and Bank of America’s blockchain patents—so regulatory clarity is seen as the final hurdle. Expected effects include increased liquidity, reduced volatility, stronger consumer protections, insured custody, and faster mainstream adoption; risks noted include greater market centralization and philosophical tensions with decentralization. The White House comment appears timed to influence April 2025 congressional hearings on the CLARITY Act. International parallels include the EU’s MiCA (2024) and the UK’s 2023 regime, creating competitive pressure for U.S. regulatory clarity. Overall, if passed, the CLARITY Act could accelerate institutional bank participation, boost market stability, and shift competitive dynamics in crypto services.
Bullish
Passing the CLARITY Act would reduce a primary barrier—regulatory uncertainty—that has kept major banks from offering crypto services. Historical precedents show that regulatory clarity and institutional product approvals (for example, approval and launch of spot Bitcoin ETFs in 2023) attract significant institutional capital, increase liquidity and generally support higher valuations. Banks bring large custodial balances, insurance capabilities and compliance frameworks, which tend to lower perceived risk and volatility over time. Short-term market reaction could be an immediate bullish spike on optimism and position adjustments by institutional traders; volatility may increase intra-day as funds reprice risk and flow expectations. Over the medium to long term, bank participation would likely deepen liquidity, compress spreads, and attract more retail and institutional inflows, producing a durable bullish tailwind. Risks that temper the bullish view include potential increased centralization, regulatory implementation details that could impose constraints, and political hurdles in Congress that may delay or dilute the legislation. Similar events: approval of spot Bitcoin ETFs in late 2023 produced a sustained inflow and bullish market sentiment; by contrast, regulatory crackdowns (e.g., 2021–2022 enforcement waves) produced sharp bearish corrections. Given current context—global peers (MiCA, UK regime) moving toward clarity—the net effect of CLARITY passage would likely be bullish for major crypto assets.