Welcome to FinTech TV.
I'm Emmy Blair.
Well, a month-long stalemate on Capitol Hill has broken a bipartisan deal, and the Senate has cleared the biggest obstacle facing the Clarity Act.
Senators Tillis and also Brooks reached a compromise on the Clarity Act, settling the dispute over how stablecoin rewards should work.
Section 404 stops crypto firms from. for real activity on the platform, but traditional banks are pushing back against the market structure proposal.
Banking groups say that the latest draft still falls short, warning this shift could drain massive deposits away from traditional lenders.
Well joining us live from Consensus 2026 here in Miami is Paul, the chief legal officer of Coinbase.
Paul, great to have you here.
Thank you so much for joining me.
Great to be with you.
Well, the past 72 hours has been a lot of momentum in the.
Capital.
You and I are here on the ground at consensus in Miami.
So what do you make of some of the developments we've seen when it comes to progress on the Clarity Act?
Well, the developments on the whole are quite positive.
For some time now, the Senate, in particular the Senate Banking Committee, has been working through any number of issues that I think have held the bill back and forged real compromises on a number of those issues in ways that we think are ultimately going to serve crypto, the crypto industry, and the crypto community.
General, um, rewards have certainly captured the lion's share of attention, but it's important to understand that there are other outstanding issues regarding DI protection for developers, and, and get others still that have required a lot of work on the part of the Senate staff and a lot of work on the part of interested parties in reaching a compromise.
Fortunately, I think we're getting very close based on what we've seen come out of the Senate Banking Committee, and I'm very optimistic we're going to see a bill marked up and ultimately sent to the Senate floor for a vote.
Yeah, and Paul, while I have you here, if you could give us a brief overview, in addition to stable coin yields, as you mentioned, there are a lot of moving parts here, and you and I are here on the ground at a conference where it's not just Trad F and DI, but also policymakers, builders, innovators.
So tell us what you think needs to happen here.
Well, I think What we're seeing all around us here at consensus is a lot of energy and excitement about what crypto could become if the United States finally gets its act together and passes sensible legislation.
That's what I think clarity ultimately represents.
The United States reasserting itself as a leader in crypto and maintaining its competitiveness globally even as other countries are racing ahead and attempting to grab that mantle of leadership from the US.
Fortunately it's not too late, and that's why I think you've seen Democrats and Republicans alike work hard to reach a consensus on the right way to regulate rewards, the right way to.
Protect D5, the right way to make sure that developers are not swept up in unnecessarily aggressive overenforcement.
So I think it's US competitiveness that's ultimately in play here, and I also think it's the future of an alternative and traditional financial system that for too long has excluded too many from it that is motivating the progress that we've seen in clarity so far.
Yeah, and you have a unique perspective, unlike some of our other guests that we might have on the show here.
So from a legal perspective, when we're talking about competitiveness on American soil here versus overseas, in addition to that competition for talent, what are you concerned about?
Well, I'm most concerned about is that Developers continue to look at the United States as the single best country in the world to build new products and services, and the reality is that over the last several years we've seen a real bleed of talent in other jurisdictions where there is much greater certainty and frankly much greater support for what the crypto.
The crypto community and the crypto industry are attempting to build.
Fortunately, with market structure legislation that defines for the first time a taxonomy for crypto assets and makes clear which crypto tokens, for example, fall to the jurisdiction of the SEC and which tokens may fall to the jurisdiction of the CFTC.
Or or other agencies entirely that we finally have a confidence being expressed on the part of the United States government in this industry in this community and a real message being sent that we want you here, we want you building here in the United States.
We recognize there are of course legitimate concerns or risks that need to be addressed.
The right way to do that is through law.
It's through rules.
It's through regulation.
It's not through lawsuits and enforcement actions that unfortunately capture the lion's share of the agenda in the previous administration.
Yes, and as you mentioned, we are paying attention to a lot of moving parts here in 2026.
It's hard to believe that we're not yet in the second half of the year, but as you mentioned, there's so much going on, and when we take a step back, whether it's geopolitics or policy or even politics, there's so much happening.
So when it comes down to it in a midterm election year, when it comes to actual regulatory progress and legislation, what are you paying attention to in both timeline as well as agenda?
Well, I think the timeline is very much driven by the political reality here in the United States, as you mentioned.
We are coming up on an important midterm election, and I think Democrats and Republicans alike recognize it if their party is to prevail in those elections and if they're Their role in driving US policy is going to continue to be significant.
They need to pay attention to the crypto voter.
We now have 52 million Americans or more who have owned a digital asset of one type or another, and we've now proven that those crypto owners are crypto voters.
They care what their elected officials have to say on important crypto policy issues, and they pay careful attention to how they vote.
And so I think that that reality combined with the fact that we are a divided country and a swing of even just a few votes in one election or another could ultimately determine who controls the House, who controls the Senate, and ultimately who controls the White House.
All that means that crypto remains on the agenda in the United States this year and I think in the years to come.
And finally, Paul, I, before I let you go, I do want to ask you about one myth that you would like to dispel, whether we're talking about legislation, regulation, or crypto.
What would you say to our American viewers out there?
Well, I think one myth that is often thrown out there is that somehow crypto is a threat to a traditional financial institution.
And risks undermining the safety and security of those institutions as we go forward.
I know there are some who in the crypto community who would love to see crypto replace traditional finance, but I think the reality is that for the foreseeable future anyway, a crypto will sit alongside a traditional finance, but in ways that reinforce uh common goals that we have in this country of access, of participation.
Of opportunity.
And so I think that the more sober-minded and reflective among policymakers understand that crypto is about expanding and extending opportunities.
It's not about taking away anyone's rights, and it's also not about undermining a traditional financial system, even as that financial system sadly needs reform.
So I'm quite optimistic that these two systems can sit side by side, and I think that with legislation nearly on the horizon, we're gonna, we're going to see continued integration of these systems in the years to come.
Well, Paul, I really appreciate your time.
Thank you so much for taking time out of your busy schedule.
Appreciate it.
Thank you.
