Former Ripple CTO Blames Bank Lobbying for Clarity Act Rejection

Former Ripple Chief Technology Officer David Schwartz, who designed XRP's ledger, has accused traditional financial institutions of lobbying against the U.S. Senate's Clarity Act, which failed to pass with 49 votes in favor and 50 against on October 17 (local time), according to blockchain media U.Today.

Schwartz argued that political rhetoric about protecting the public actually serves to maintain commercial banks' dominance. His comments came as a rebuttal to Republican Senator Josh Hawley, who opposed the bill by claiming legalizing interest-bearing stablecoins could cause deposits to flee small Missouri banks and reduce loan funding for local farmers.

Schwartz countered that the opposition was ultimately about protecting bank profits, noting the Clarity Act would not significantly weaken banks' lending capacity. He suggested that even if changes occurred, investors seeking appropriate returns under manageable risk could create a new digital ecosystem directly lending to real-world economies through market principles.

Senators Tillis, Moran, and Collins voted against their party's stance on the bill, which Schwartz criticized as siding with bank lobbying and the American Bankers Association. Meanwhile, the U.S. Securities and Exchange Commission delayed approving Teucrium's '2x Short Daily XRP ETF' until October 11, marking its 19th postponement. The product is designed to profit from XRP price declines.

Teucrium's '2x Long Daily XRP ETF,' however, is already operational with $151 million in assets under management. Schwartz expressed a sarcastic reaction to the short ETF delay, indicating he had anticipated a short-selling opportunity. With ongoing regulatory pressure, XRP has fallen to $1.29.