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The release of the text of the bi-partisan Cryptocurrency Market Structure Bill on Monday left much of the cryptocurrency community unsatisfied.
Most critics direct their frustration at bank lobbyists. However, a smaller group argues that the real beneficiaries are the large cryptocurrency companies that are expected to defend the interests of the wider industry.
Crypto reacts to the 278-page proposal
later Months of negotiationsThe chairman of the Banking Committee of the Senate, Tim Scott, published the text of a negotiated project that outlines a framework for the digital currency market. The move brings the CLARITY Act one step closer to passage, as the legislation aims to establish clearer rules for the digital asset market.
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“Reflect on this,” Scott said in a statement the law “A month of hard work, ideas and concerns raised in committee, give ordinary Americans the protection and certainty they deserve.”
What should have been a moment of joy quickly turned into a backlash as influential voices began to review the 278-page proposal.
Early critics focused on the clauses That is widely seen as favoring banking interestswhich has long clashed with crypto proponents over concerns that the digital asset could undermine its share of the traditional market.
The focus was mostly on the departments What about stablecoin returns. The latest draft restricts companies from paying only interest in exchange for maintaining balances and limits the scope of bonus offers.
However, not all cryptocurrency companies will face negative consequences if lawmakers approve the bill as currently drafted.
The big established crypto players appear to be in a position to benefit the most, raising questions about where smaller participants will ultimately fit into the new regulatory framework.
Because the main crypto companies benefit more from the current proposal
To better understand who will benefit from the project in its current form, BeInCrypto spoke with Aaron Day, a veteran cryptocurrency entrepreneur and regulatory critic who reviewed the proposal.
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These include real-time trade monitoring, expanding registration requirements, and the importance of using qualified custodians. Together, these actions significantly increase the cost of operating the US cryptocurrency market.
Therefore, Day argued that Established cryptocurrency company Only she can bear these burdens. Smaller players face a structural disadvantage from the start.
“You described an infrastructure that Coinbase already has that a startup in a garage cannot afford. Coinbase has spent years and millions building regulatory relationships. This law dilutes its competitive advantage in the law,” said Day to BeInCrypto.
Circle also benefited, Day added. According to him, the stablecoin provisions in the project favor fully regulated issuers. This puts the company behind the USDC In the position to make the most profit If the legislation is approved in its current form.
At the same time, the proposal also imposes trade monitoring. Under these rules, every exchange must implement real-time monitoring.
“Chainalysis succeeds because mandatory monitoring means a constant demand for its blockchain analysis tools. Every exchange now needs something to sell. It’s not a conspiracy, it’s just how regulatory control works,” added Dai.
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He stressed that this dynamic reflects a broader pattern in which regulatory frameworks tend to consolidate existing power structures rather than disrupt them.
“Incumbent MPs help write the rules, and then the rules happen to favor the incumbents.”
As a result, smaller players face difficult choices, where… Decentralized Finance (DeFi) It is the most vulnerable group.
When funding is needed without government permission
According to Dai, smaller exchanges will have to choose between spending big to meet compliance requirements Or exit the market completely.
As for decentralized finance, the bill introduces language that could, for the first time, require protocol developers to register with federal regulators. Such a move would effectively treat builders as regulated entities rather than neutral software creators.
“The whole point of DeFi was that no one needed permission to build or stake. If you need government approval to implement a smart contract, you’ve basically broken what made it interesting,” Dai told BeInCrypto.
Although the law does not outright ban DeFi, Day warned that it could It creates legal uncertainty So much so that American developers could simply build elsewhere.
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However, what may be most shocking about the proposal is its direct contradiction to Satoshi Nakamoto’s original vision for Bitcoin.
Bitcoin’s cyberpunk roots are under pressure
Bitcoin was originally designed As a peer-to-peer electronic cash system It aims to eliminate the need for trusted intermediaries.
Name highlighted Nakamoto aka Bitcoin’s roots in cypherpunk include the importance of financial privacy as a basic principle, not as a secondary function.
“When every transaction is monitored, reported, and potentially shared with foreign regulators, you rebuild the surveillance architecture of the traditional banking system on the block chain. You look at the technology and throw away the philosophy,” said Day.
He noted that the Bitcoin community itself may be divided in its response.
Some will argue that Bitcoin remains untouched, as users can still hold their assets and run their nodes. However, the entry points and exit points, especially the centralized exchanges where most users access Bitcoin, will fall under strict regulatory control.
Thus, using Bitcoin is increasingly similar to using a traditional bank account.
“I’m not against regulation in principle. I’m against it Organization designed by existing employees To benefit incumbents while selling to the public as consumer protection. This pattern is repeated across industries and departments. Both parties participate because both parties are funded by the same interests,” Day concluded.
