- The US Senate proceeded with the Clarity Act markup and confirmation of Kevin Warsh as Fed chair.
- Bitcoin rallied following two bullish events in the digital asset industry.
The US Congress just triggered two bullish catalysts in the crypto sector. On Thursday, the Clarity Act finally reached the Senate floor, and senators confirmed Kevin Warsh’s nomination as Federal Reserve chair.
The latest developments propelled Bitcoin (BTC) from $78K to $82K in the last 24 hours, as the two-for-one affair negated analysts’ expected “sell the news” scenario. As of writing, the premier crypto asset is trading around $81K, with the big-cap altcoins following suit, indicating sustained investor confidence and a potential bullish shift in market sentiment.
Clarity Act Markup
The Senate Banking Committee’s version of the bipartisan Clarity Act advanced as scheduled in Congress’s upper chamber. The move positions it for harmonization with the provisions of the Agriculture Committee’s version.
The delay in the Banking Committee’s version stemmed from the deadlock between banking and crypto lobbyists on several provisions of the bill. The main argument centered on stablecoin yields from idle holdings.
The banking sector and trade groups argued that allowing such a mechanism would divert up to $6 trillion from bank deposits into stablecoins. After months of deliberation, with the White House’s intervention, the parties eventually settled on a ban on yields that are “economically or functionally equivalent” to interest payments on bank deposits. On the other hand, it would allow “activity-based rewards,” such as rebates, cashback, loyalty points, and others outside the scope of the proposed restrictions.
Supporters of the banking sector attempted to push for a more favorable outcome at the last minute, proposing a ban on all stablecoin and crypto yields. However, the Banking Committee carried forward what it had already agreed with crypto representatives.
Now, the bill is set to undergo further scrutiny in the Senate, where lawmakers will also debate its other provisions. These include ethical standards for elected officials, consumer protection, illicit finance, safe harbor for software developers, and other matters.
Kevin Warsh Confirmation
Kevin Warsh secured a 54-45 vote on his confirmation. Republicans favoring his bid and Democrats opposing it due to his close links with US President Donald Trump have split the outcome. Only Senator John Fetterman (D-PA) supported Warsh from his party.
Warsh will succeed Jerome Powell as Fed chair this month, with the latter retaining his position on the central bank’s Board of Governors. The new chair’s Fed meeting is scheduled in mid-June.
An overwhelming majority in the crypto community warmly welcomed Warsh’s Fed bid, citing his prior exposure to several crypto- and artificial intelligence (AI)-related projects through investments. Furthermore, he strongly opposed retail-focused Central Bank Digital Currencies (CBDCs).
During his confirmation hearing, Warsh assured the public and lawmakers that he would maintain the Fed’s independence amid allegations of Trump’s strong influence. He claimed that the president never once asked him to commit to a particular interest rate, and even if Trump had, he wouldn’t have agreed to it.
