Crypto’s Clarity Act Has a New Enemy: Catholic Leaders

In brief Catholic leaders urged the Senate to oppose a portion of the Clarity Act, warning it could enable human trafficking and other illicit finance. Protections for decentralized software developers could shield tools used for money laundering, the leaders said. The Clarity Act is facing opposition from multiple directions as boosters seek to pass it in the coming weeks. The crypto industry’s long-coveted Clarity Act has attracted plenty of opponents in recent months, among them Wall Street leaders, consumer advocates, law enforcement groups, and Native American tribes. Now, the market structure bill has attracted the ire of a new and perhaps unexpected constituency: Catholics.In a letter sent Tuesday to Senate leaders in both parties, a coalition of Catholic leaders and organizations warned that the legislation—which would legalize most crypto activity in the United States—could violate Christian beliefs by enabling the funding of human trafficking.“Catholic social teaching calls us to uphold solidarity, protect the vulnerable, and ensure that economic systems are ordered toward justice rather than exploitation,” 82 Catholic leaders wrote in the letter. “The test of any financial system is not simply whether it generates wealth or innovation, but whether it safeguards human life and dignity,” they continued.The religious leaders were brought together by the Alliance to End Human Trafficking, a faith-based nationwide network. Their letter was first reported by Punchbowl News.The group specifically called out a section of the Clarity Act dubbed the Blockchain Regulatory Certainty Act (BRCA), which would exempt developers of decentralized crypto software from criminal prosecution. Many crypto industry leaders have said the BRCA is a red line for them, and that they would not support the legislation if it was removed.In the past year, the Trump DOJ has sent multiple crypto software developers to prison for creating software that allows any customer to make their on-chain transactions private. Such programs have been used to fund criminal activity and facilitate money laundering. Because transactions on cryptocurrency networks are transparent by default, decentralization advocates insist the tools are essential to afford digital money the same privacy as a bank account or cash.In today’s letter, Catholic leaders argued the BRCA “may make it more difficult to responsibly monitor illicit financial activity tied to trafficking, organized crime, child exploitation, sanctions evasion, and other forms of abuse.”The BRCA has recently come under fire from law enforcement groups with similar concerns. But it is not the sole obstacle currently standing in the way of the Clarity Act’s passage. The bill is currently facing concerted opposition from Wall Street, which wants language added restricting stablecoin rewards; from Native American tribes, which want clauses restricting the ability of prediction markets to offer sports-based wagers; and from some Democrats, who insist the bill must restrict the numerous lucrative crypto ventures of President Donald Trump and his family.Many industry leaders have said that if the bill cannot pass by next month, it is unlikely to become law this year, given the looming November midterms. Daily Debrief NewsletterStart every day with the top news stories right now, plus original features, a podcast, videos and more.