The "CLARITY Act" Sparks Controversy: Will High Regulatory Thresholds Stifle DeFi Innovation?

【Crypto World】A 278-page bipartisan joint proposal—the “CLARITY Act”—was recently released and immediately drew a lot of criticism. The criticism points to the possibility that the bill favors large institutions such as major exchanges and payment service providers.

Entrepreneur Aaron Day and others express core concerns: the bill imposes strict compliance standards for real-time monitoring, exchange registration, and asset custody. On the surface, it may seem manageable, but in reality? The costs behind these requirements are prohibitively high. Small and medium-sized startups and emerging platforms simply can’t afford it, ultimately benefiting giants with ample capital and operational systems, leading to a more entrenched market landscape.

What’s even more worrying is that the bill also plans to extend registration obligations to DeFi developers. It’s important to remember that permissionless operation is the foundation of DeFi. What does it mean if this line is crossed? Innovation space shrinks, startup costs skyrocket, and many early-stage projects could die before birth. From a broader perspective, this regulatory approach may drift away from the decentralization spirit advocated by Bitcoin.