Goldman Sachs (NYSE: GS) Chairman and CEO David Solomon stepped out ahead of Wall Street this week, voicing his support for a sweeping piece of crypto legislation even as the bill’s chances of becoming law this year take a serious hit.
“I’m very supportive of moving the Clarity Act forward, so we can get some market structure in place and start to move the innovation process along,” Solomon told Politico.
The Digital Asset Market Clarity Act, if enacted, would formally bring most crypto activity within a legal framework in the United States. It would classify the majority of crypto tokens as non-securities, putting them beyond the reach of the Securities and Exchange Commission (SEC).
The bill also includes protections for developers who build decentralized software, and takes up the question of whether crypto platforms should be allowed to pay interest on stablecoin holdings.
Solomon admitted the bill has its flaws, saying it is “not perfect” and that, like any legislation, there is room for disagreement. But he argued its real worth is in establishing “a level playing field to enhance market stability and allow these markets to develop appropriately.”
He also suggested the bill could bring more large financial institutions into crypto, something Goldman has been pushing for.
His support goes against other major banks who see the bill’s stablecoin yield provision as a threat.
Banks dig in over stablecoin yields
Stablecoins are dollar-pegged tokens that allow holders to move in and out quickly and are a faster way when it comes to abroad transfer of funds.
Coinbase and other crypto companies offer better rewards on stablecoin balances, which can go upto 3%- 5% per year on tokens like Circle’s USDC. This challenges the sum that banks offer on savings accounts. The crypto rewards were recognized into law through the GENIUS Act. The banks have been pushing hard to reverse that ever since.
JPMorgan Chase CEO Jamie Dimon has led the charge against it. During a Fox Business appearance in May, he argued that fewer rules give the crypto industry an advantage and “The banks will not accept it that way”.
A group of the country’s largest banking trade associations also warned senators in May that a compromise version of the stablecoin yield rules still contained gaps that could allow companies to get around the restrictions.
Coinbase CEO Brian Armstrong pushed back, saying banks are simply trying to protect their deposit-based business by going after a competitor.
Solomon’s endorsement comes at a tricky moment for the bill
Republican senators circulated updated draft language this week that keeps the bill’s core crypto rules intact but adds new limits on what government officials can do in the crypto space.
Democrats have already said that language does not go nearly far enough, particularly when it comes to President Donald Trump’s crypto dealings, as reported by Cryptopolitan previously.
Senate Majority Leader John Thune made clear Thursday that the bill will not pass before Congress breaks for its summer recess. That is a significant blow; negotiators had pointed to August 7 as the date the bill needed to clear the Senate to have a realistic shot at passing in 2026.
Odds on prediction platform Polymarket have dropped to about 38%, down from over 80% earlier this spring.
Thune did leave open the possibility of beginning the Senate floor process before the recess, which could set up a narrow chance in September. “I would like to at least get Clarity started,” he told reporters. “We’ll see where the votes are.”
The Senate’s first order of business next week, however, will be a bipartisan Russia sanctions bill that the late Senator Lindsey Graham had championed before his death earlier this month.
Ron Hammond of crypto trading firm Wintermute said support for the Clarity Act still exists in the Senate, but that “the voice of election politics is louder,” with midterm campaigns ahead in November.
Senator Cynthia Lummis of Wyoming, one of the bill’s main Republican negotiators, said the most disputed sections remain open for changes that she believes could bring more Democrats on board, but time is running short.
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