The US Digital Asset Market Structure Clarity Act - known as the CLARITY Act - threatens to concentrate crypto infrastructure in the hands of large financial institutions, according to Dr. Friederike Ernst, co-founder of Gnosis.
Ernst argues the bill assumes all activity must flow through centralized intermediaries - eroding blockchain’s core innovation: user-owned networks. "If activity is pushed back through institutional intermediaries, users risk becoming customers renting access to financial technology once again rather than stakeholders in it."
While the CLARITY Act clarifies SEC vs. CFTC jurisdiction and protects peer-to-peer transactions and self-custody, it fails to safeguard open, permissionless rails and DeFi protocols.
The bill remains stalled over disputes between crypto firms and banks - particularly on stablecoin yield. Coinbase withdrew support, citing threats to DeFi and tokenized real-world assets. CEO Brian Armstrong stated: "We’d rather have no bill than a bad bill."