“Treasury Secretary Bessent said market participants who don’t want strong regulation should “move to El Salvador.””, — write: www.coindesk.com
“There seems to be a nihilist group in the industry who prefers no regulation over this very good regulation,” Bessent said in testimony before the Senate Banking Committee.
“Amen, brother,” said Virginia Senator Warner, one of the key Democratic negotiators on the bill. “So weigh in.”
“I do,” Bessent responded. “Early and often.”
A number of crypto industry participants, including Coinbase CEO Brian Armstrong, have been critical of provisions in the bill, pointing to concerns around how it addresses decentralized finance regulation, stablecoin yield rewards and the way it defines tokens as securities. Armstrong’s withdrawal of support for a version of the legislation moving through the Senate Banking Committee last month had been consequential.
Warner said in the hearing that a further meeting is expected on the regulatory effort within the next few days, and he suggested Bessent was set to be invited. In those ongoing talks, Warner has been an outspoken voice on crypto’s illicit financial threats, leading much of that discussion in the legislative negotiations.
“I feel like I’m in crypto hell,” Warner said, eliciting some laughs in the hearing room. “We are working our tail off.”
He said other technical points in the bill can be resolved, but he suggested addressing “some of the gaps” related to national security and decentralized finance (DeFi) remains his focus.
“We’ll deal with yields and rewards; we’ll deal with a host of other issues; but these national security issues around DeFi are real, and we need to not create a set of rules that leaves huge exemptions and, frankly, takes away some of the prosecutorial powers that exist today,” Warner said.
Bessent, who did not call out any resistant crypto industry representatives by name, went on to underline the importance of passing the Digital Asset Market Clarity Act in the Senate. The bill has struggled to maintain momentum as lobbyists from crypto and banking have clashed with each other over the question of stablecoin yield and lawmakers from the parties can’t find agreement on certain other provisions. The Treasury secretary argued that the industry cannot advance in the US unless the bill passes.
“It’s impossible to proceed without it,” he said. “We have to get this Clarity Act across the finish line. And any market participants who don’t want it should move to El Salvador.”
Bessent said that he thinks the earlier GENIUS Act to regulate US stablecoin issuers struck a good balance that can eventually be repeated in the Clarity Act.
“There seem to be people who want to live in the US, but do not have rules for this important industry, and we’ve got to bring safe, sound and smart practices and the oversight of the US government, but also allow for the freedom that is crypto,” Bessent said, adding that as both parties continue to work on the Clarity Act, it can get “across the line this year.”
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