Mike Novogratz warned that a U.S. crypto market structure bill faces serious failure risks due to political disagreements over stablecoin yields. The debate centres on banking interests and regulatory reach; its outcome could affect American consumers and crypto adoption.
Novogratz shared his concerns on X, linking the dispute to broader U.S. political dynamics. He stated that banks resist crypto platforms offering yields to users, which may derail the legislation.
The draft emerged from the Senate Banking Committee and addresses how crypto businesses operate in the United States. According to Galaxy Digital, it goes further than the House-passed CLARITY Act.
The bill aims to clarify crypto market structure through updated operating rules. Still, disagreements over stablecoin yields have slowed progress. Banks fear competition that could reduce deposit margins.
Novogratz said the dispute reflects politics overriding policy goals. He warned that failure could limit consumer benefits and innovation. The bill’s delay also raises uncertainty for firms seeking regulatory clarity.
The House previously passed the CLARITY Act, which set baseline rules. Galaxy stated the Senate draft reaches further into user-facing areas. That expansion has intensified lobbying pressure.
One provision introduces a new “special measures” authority for the Treasury. The power allows officials to flag risky countries' platforms or transaction types. They could then slow or block activity.
Another rule permits temporary transaction freezes. Treasury agencies may request pauses of up to 30 days before involving the court. Galaxy compared this authority to measures under the Patriot Act, citing a report from Yahoo Finance.
These provisions would pull many crypto apps into bank-style oversight. Platforms would need to monitor wallets and block sanctioned activity. As a result, user experiences could shift closer to online banking.
Galaxy said the bill could mark the largest expansion of financial monitoring since the Patriot Act. Civil rights groups, including the ACLU, have long criticized such powers. This comparison has also raised privacy concerns.
At the same time, regulators would gain faster tools to trace suspected crime. Authorities could act quickly to follow money flows. That speed could change enforcement across crypto platforms.
Market reactions remain mixed. Novogratz linked gold price strength to worries about the U.S. dollar’s global role. He also said Bitcoin’s resurgence depends on clearing key price levels, prompting one question: Will regulatory deadlock reshape how Americans access crypto?
Novogratz also pointed to opposition from Coinbase leadership. CEO Brian Armstrong said the bill could harm decentralized finance. Teams building open tools now face higher compliance costs and legal risk.
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The U.S. crypto bill faces growing uncertainty as political disputes over stablecoin yields slow progress. Mike Novogratz warns the deadlock could expand Treasury powers and alter user experience. Lawmakers now face pressure to balance regulation, innovation, and consumer impact before adoption stalls.