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Investor and hedge fund manager Mark Yusko said that the proposed CLARITY Act could strengthen the position of large financial institutions in crypto markets rather than support decentralization, as U.S. lawmakers prepare for a key Senate committee vote on the legislation this week.
The Senate Banking Committee officially scheduled the CLARITY Act markup for Thursday, May 14, at 10:30 a.m. ET, in what would be the first committee vote on a full U.S. crypto market structure bill.
The legislation has gained momentum after a stablecoin yield compromise between lawmakers, helping move the bill out of months of procedural delays.
Prediction market Polymarket now shows traders assigning a 75% chance that the CLARITY Act becomes law in 2026, up 10 percentage points from earlier levels.
Yusko warns of “walled gardens.”
Not everyone in the crypto industry is celebrating the bill’s progress.
Yusko criticized the legislation, arguing that it could ultimately create “walled gardens” controlled by major banks and financial institutions rather than open decentralized systems.
“The bill may ultimately strengthen walled gardens controlled by major financial institutions rather than promote true decentralization,” Yusko said.
He argued the legislation could consolidate power among large banks and crypto exchanges, while restricting participation from smaller market players.
Yusko also warned that the framework could further entrench dollar-backed stablecoins tied to government debt and preserve existing financial spreads for traditional institutions.
He criticized accredited investor frameworks and stablecoin reward limitations, suggesting the proposals may protect incumbents more than retail participants.
Key Issues Remain Before the Senate Committee Vote
Despite rising optimism around the legislation, several major issues remain unresolved ahead of Thursday’s markup.
Banking industry groups are still pushing for last-minute language changes, while Senator Kirsten Gillibrand warned there would be no agreement without provisions banning crypto insider trading and addressing Trump-family ethics carve-outs.
Debate also continues around decentralized finance oversight language and securing full Republican support for the bill.
Meanwhile, CFTC Chair Mike Selig publicly called for immediate passage of the legislation.
If the committee approves the bill this week, it would move toward a Senate floor vote in June. Market participants view the coming days as one of the most consequential periods for U.S. crypto regulation this year.