Gnosis Founder Warns: Pushing CLARITY Act Will Hand Over Crypto Sovereignty to Centralized Wall Street

Blockchain core breakthroughs lie in enabling users to become owners of the network, not tenants—warns Gnosis co-founder Friederike Ernst. If the CLARITY Act mandates all transactions go through centralized institutions, this fundamental advantage will be lost.
（Background: In-depth analysis of the CLARITY Act: a new-old financial century game under the guise of regulation）
（Additional context: The setback of the CLARITY Act benefits the crypto industry and Bitcoin, prompting all parties to return to the negotiation table）

Gnosis blockchain protocol co-founder Friederike Ernst recently issued a stern critique, pointing out that the current provisions of the U.S. Digital Asset Market Structure Clarity Act (CLARITY Act) effectively assume all crypto activities must flow through centralized intermediaries. This move risks handing over the underlying infrastructure of the crypto industry to a few entrenched financial giants.

“The true breakthrough of blockchain is not just a new financial infrastructure, but enabling users to become owners of the network they rely on,” Ernst said. “If all activities are forced to go through institutional intermediaries, users will regress from stakeholders to customers renting financial technology.”

Ernst emphasized that regulatory clarity is necessary, but the problem lies in: clarity should not come at the expense of ownership models. She worries that if the CLARITY Act fails to effectively protect open, permissionless blockchains and decentralized finance (DeFi) protocols, it will simply replicate the centralized failure points of traditional finance into the crypto industry.

Pros and cons of the bill, Coinbase takes the lead in opposition

Ernst does not completely reject the bill. She acknowledges that the CLARITY Act clarifies the SEC and CFTC’s jurisdiction over crypto markets and explicitly protects peer-to-peer transactions and self-custody rights. However, these advantages are still insufficient to address the fundamental flaws in decentralization protection.

Crypto exchange Coinbase has already taken action. In January this year, Coinbase announced it would withdraw support for the CLARITY Act, citing clauses that weaken DeFi, ban stablecoin yield sharing, and hinder tokenization of real-world assets (RWA). CEO Brian Armstrong stated on X after reviewing the draft: “Better no law than a bad one.”

Stablecoin yield disputes stall legislation

Currently, the CLARITY Act remains stalled in Congress, with the core issue being a fundamental disagreement between the crypto industry and traditional finance over stablecoin yields—specifically, whether stablecoin issuers can share interest with holders. This seemingly technical detail has evolved into a turf war between traditional financial powers and crypto-native forces.

U.S. Senator Bernie Moreno expressed optimism, believing the bill could complete legislative procedures before April and be sent to President Trump for signing. However, Galaxy Research head Alex Thorn offered a more cautious assessment. He pointed out on X that if the bill cannot clear hurdles by April, the chances of passing into law by 2026 are “very low,” adding: “Stablecoin yields are likely not the final obstacle, but just the mountain blocking the bill now.” Issues like DeFi provisions, developer protections, and regulatory authority could trigger new conflicts later.

Observation: The legislative process of the CLARITY Act is essentially a political struggle over “control of the crypto network.” Ernst’s warning highlights a core paradox: if regulatory clarity comes at the cost of making centralized institutions indispensable gatekeepers, then what this bill protects may be the commercial interests of financial institutions rather than user autonomy.