The Clarity Act will help fuel Coinbase's EU crypto growth.
The landmark legislation will give confidence to the exchange's institutional customers.
It could also help shape reform of the EU's own crypto regulation.
The US Clarity Act is shaping up to be the most important piece of crypto legislation to date.
But the landmark crypto market structure bill will also have a significant impact across the pond in Europe, according to Côme Prost-Boucle, Coinbase’s expansion manager for the European Economic Area.
That’s because whether the bill passes, and what provisions it contains, will impact investor confidence and fuel efforts to reshape parts of the EU’s own crypto regulations.
“Everyone is looking at the Clarity Act and the Genius Act in the US,” Prost-Boucle told DL News in an interview at EthCC is Cannes. “This is what’s driving most of the market.”
Like in the US, banks and money managers across Europe are piling into crypto following the lead of industry titans like BlackRock and Fidelity. But they need a regulated, safe and clear environment to do so, Prost-Boucle said.
The EU’s Markets in Crypto-Assets regulation, or MiCA, has already gone a long way to provide that.
The Clarity Act, which will define crypto rules in the US for the first time, also impacts European investors, Prost-Boucle said, because it will help set the tone for crypto regulation globally.
Aligning regulation
How institutions are feeling about crypto is key to Coinbase’s EU growth. In recent years, the exchange’s customer base has shifted.
“The market has been historically driven by retail clients, and now we’re seeing more and more institutions getting into the space,” Prost-Boucle said.
One big ask from Coinbase’s institutional clients — both in the EU and the US — is the ability for stablecoin issuers to provide yield on digital dollars.
Proponents want to offer yield to attract customers, which makes holding stablecoins far more attractive than plain cash or bank deposits.
Coinbase has actively lobbied for a stablecoin yield provision in the Clarity Act since the start of the year, at one point pulling its support after wording in the bill excluded it.
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Yet the EU’s MiCA regulations, which Coinbase already works under, do not let stablecoin issuers distribute yield.
Prost-Boucle said it’s beneficial for Coinbase if regulations in the EU and the US were aligned. So, does that mean Coinbase could lobby to change provisions in the EU’s MiCA regulation to let stablecoin issuers provide yield?
Lobby is a big word, Prost-Boucle said.
For starters, the provision would have to make it into the final draft of the Clarity Act, something that’s still far from certain.
“I think that’s correct to assume that by trying to preserve yield in the US this could potentially affect MiCA,” Prost-Boucle said, adding that Coinbase has already engaged in major discussions on MiCA reform with market authorities across the EU.
“If the US is pushing for something, we’re also trying to push for the same thing for MiCA so that we have globally connected regulation,” he said.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
