Patrick Witt Defends Trump's Crypto Investment Persuasiveness, Points to Bank Lobbyists as the Real Force Behind the Clarity Act

On Wednesday, during a seminar on financial market quality hosted by Columbia University, Patrick Witt, Executive Director of the White House Digital Asset Advisory Committee, publicly voiced support for Trump's allocation of crypto assets. In response to concerns about potential conflicts of interest, Witt pointed out that Trump has not only approved two unprecedented government ethical standards but has also expressed willingness to accept compliance arrangements that would involve divesting related crypto assets or placing them in a Blind Trust.

Witt sharply criticized some politicians for politicizing conflicts of interest. He cited the recently approved housing bill as an example, questioning why it was able to avoid stringent ethical scrutiny. He further revealed that many members of the Senate Banking Committee are privately trading stocks of financial institutions within their regulatory jurisdiction while accusing the president of conflicts of interest, which he deemed highly ironic.

Unveiling the Setbacks Behind the Bill

Regarding the much-anticipated Clarity Act's failure in the Senate, Witt pointed the finger at the interests of traditional banking. He delved into the underlying commercial games: interest-bearing stablecoins are gradually evolving into direct competitors of large commercial banks.

To delay or even thwart the implementation of the bill, lobbying teams from traditional financial institutions first incited opposing sentiments within large banks, which then rapidly spread like "wildfire" to regional community banks. By promoting this opposing narrative within the financial circle, the banking lobby successfully stalled the progress of crypto legislation.

Regulatory Focus Shifts to Federal Agencies

Despite the legislative resistance at the congressional level, the regulatory machinery for U.S. digital assets has not come to a halt. Just a day before the seminar, at the CoinDesk Policy Summit, Witt and Luke Pettit, Assistant Secretary for Financial Institutions at the U.S. Treasury, released the latest policy direction. Pettit admitted that while the Clarity Act has not been completely shelved and is expected to restart its push before the end of the year, the overall atmosphere in Congress is relatively lukewarm.

As a result, the strategic focus at the White House has undergone a substantial shift, increasingly relying on the administrative powers of federal regulatory agencies. Witt emphasized that the recent substantial breakthroughs in crypto rule-making by the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC) provide no reason for decision-makers to let the entire industry's compliance process stagnate while waiting for the lame-duck Congress to engage in its political games.