U.S. Treasury Secretary Scott Bessent issued a sharp rebuke to cryptocurrency industry participants blocking progress on regulatory legislation.
Speaking before the Senate Banking Committee on Thursday, Bessent called industry opponents "nihilists" who prefer no regulation over compromise.
Coinbase CEO Brian Armstrong withdrew company support for the bill in January over stablecoin yield restrictions.
Bessent's testimony came as negotiations over the Digital Asset Market Clarity Act remain stalled following Coinbase's public exit. The Treasury Secretary said passing the legislation is essential for the industry's future in the United States.
"There seems to be a nihilist group in the industry who would prefer no regulation over this very good regulation," Bessent testified. He added that market participants opposing the framework should "move to El Salvador."
What Happened
Bessent appeared before the Senate Banking Committee to discuss financial stability oversight. Democratic Senator Mark Warner of Virginia expressed agreement with the Treasury Secretary's frustration over industry resistance.
"Amen, brother," Warner responded during the hearing. "So weigh in."
Warner, a key Democratic negotiator on the bill, said he feels like he's "in crypto hell" working on the legislation. He indicated another meeting on the regulatory effort is expected within days.
Armstrong withdrew Coinbase's support for the Clarity Act on Jan. 14, citing concerns over provisions that would restrict stablecoin yield payments. The exchange CEO argued the draft would ban tokenized equities and impose excessive restrictions on decentralized finance protocols.
Industry figures including Ripple (XRP) CEO Brad Garlinghouse have expressed support for continuing negotiations on the bill.
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Why It Matters
The standoff reveals deepening divisions between major cryptocurrency companies and banking interests over market structure.
Banking lobby groups have pushed for restrictions on stablecoin yield programs, arguing they could trigger deposit flight from traditional institutions.
Bessent appeared sympathetic to banking concerns during his testimony. Responding to Senator Cynthia Lummis, he emphasized the importance of deposit stability for community lending.
Warner said technical issues in the bill can be resolved but stressed his focus on national security gaps related to decentralized finance. He warned against creating rules that remove existing prosecutorial powers over illicit activity.
The Clarity Act has struggled to maintain momentum as crypto and banking lobbyists clash over stablecoin provisions and lawmakers disagree on regulatory jurisdiction between the SEC and CFTC.
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