The Amendment to the 'CLARITY Act' Defining the Scope of Bank Crypto Transaction Activities Passes

BlockBeats News, May 15th, Senator Cynthia Lummis proposed an amendment during the Banking Committee hearing on the "CLARITY Act," regarding the permissible scope of banks and credit unions in digital asset activities. The amendment includes: clarifying the types of transaction activities banks can engage in and expanding the applicability to custodial institutions.

Senator Warren opposed the amendment, stating, "While I acknowledge that this amendment makes some limited improvements to a certain part of the bill (significantly expanding the types of crypto-related activities banks eligible for additional FDIC insurance protection can engage in), it falls far short. Under this amendment, banks could engage in decentralized finance transactions, lend against crypto assets as collateral, directly trade crypto assets, trade crypto derivatives, and much more—all potential points of failure. Why are Republicans trying to move Americans' deposits away from small business and home loans? It makes no sense. Even with this amendment passing, the next crypto crash could still take down banks and, by extension, the entire economy. We should outright remove this part instead of trying to patch around the edges and pretend the issue is fixed."

The amendment was passed with 19 votes in favor and 5 against. The "Cryptocurrency Market Structure Act" (i.e., the CLARITY Act) is currently undergoing a line-by-line vote on the proposed amendments.