A White House digital assets adviser said large institutions are holding back from crypto markets because U.S. rules still lack a clear, workable framework, leaving what he described as “trillions” in potential capital on the sidelines.
Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, made the remarks in a Yahoo Finance interview while pushing lawmakers to finish a broad market structure bill known as the Digital Asset Market Clarity Act.
Witt’s message landed as Congress and regulators face renewed pressure to define which federal agencies oversee different parts of the crypto market, a long running dispute that has shaped enforcement actions and compliance planning across the industry.
CLARITY Act clock ticks toward the 2026 midterms
Witt argued that the CLARITY Act is central to moving major firms off the sidelines because institutional investors often require stable rules on custody, disclosure, and supervision before deploying large allocations into new markets.
He also warned that the legislative calendar narrows as the November 2026 midterm elections approach, a practical constraint that can freeze complex negotiations and reduce the time available for committee work and floor votes.
The House has already advanced its approach to market structure, but negotiations have tightened around Senate language and the boundaries of SEC authority, creating a fresh chokepoint even as the White House tries to broker agreement between banks and crypto firms.
Stablecoin yield fight blocks a deal
The most immediate conflict centers on whether companies should be allowed to offer rewards tied to holding stablecoins, a feature banks say could pull deposits away from traditional accounts and reshape funding across the banking system.
Crypto industry groups have pushed back, arguing that a blanket prohibition would weaken competition and that guardrails can address risk without eliminating incentives, a position outlined in competing “principles” documents circulating among negotiators.
White House hosted meetings have been described by participants as constructive, but they have not produced a final compromise, leaving the broader CLARITY push exposed to delays even as Witt frames regulatory certainty as the trigger for institutional participation.
