Former CFTC Chairman Chris Giancarlo said U.S. banks need the stalled CLARITY Act — the proposed crypto market structure bill — more urgently than the digital assets industry itself, warning that financial institutions risk falling behind global competitors without regulatory certainty.
What Happened: Market Structure Bill Stalls
Giancarlo, who led the Commodity Futures Trading Commission from 2017 to 2019, made the remarks Sunday during an appearance on Scott Melker's The Wolf Of All Streets podcast. He described the landmark stablecoin law enacted last July, the GENIUS Act, as "the appetizer" for crypto regulation.
The market structure bill, formally known as the CLARITY Act, is what he called the main course — and the difficult part. The legislation has been stuck since the Senate Banking Committee published its draft in mid-January, with crypto industry leaders pushing back against several provisions, including restrictions on stablecoin issuers.
Banks cannot move forward without clear rules, Giancarlo argued.
"Their general counselors are telling their boards, you can't invest billions of dollars in this unless you've got regulatory certainty," he said, adding that institutions need to lead innovation rather than trail it.
The crypto industry, by contrast, will simply build elsewhere. "They are risk-takers. They're going to build it here, or they're going to build it abroad," Giancarlo said.
Should the bill fail, he expects the heads of the Securities and Exchange Commission (SEC) and CFTC to set interim rules on their own — though without the lasting certainty that legislation would provide. "Crypto doesn't need it. They were building even under the whip hand of Gary Gensler," he added.
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Why It Matters: Legislation Odds Remain Uncertain
Giancarlo placed the odds of the CLARITY Act passing at 60-40 in favor, but acknowledged significant headwinds. The bill has become a partisan issue, with Republicans and Democrats at odds, and traditional finance clashing with decentralized finance and emerging technologies.
Last month, Treasury Secretary Scott Bessent urged legislators to pass the bill this spring. He pointed to a bipartisan working group making progress but warned that a Democratic takeover of the House in November could end the effort entirely, given the previous administration's aggressive stance toward the industry.