During an interview at the World Economic Forum (WEF) in Davos, David Sacks, the White House crypto czar, expressed his belief that traditional banks and cryptocurrency firms will converge into a single digital asset industry once regulatory changes are enacted.

This statement came as discussions regarding the stalled CLARITY Act, legislation intended to clarify the market structure for crypto and stablecoins, continued to evolve.

Sacks indicated that disagreements surrounding stablecoin yields are currently hindering legislative progress. He emphasized the necessity for collaboration among lawmakers, banks, and crypto entities to push a market structure bill through to the President for approval.

“Once the bill is signed, banks will fully engage with the crypto sector. There won’t be a distinct separation; instead, there will be one cohesive digital asset industry.”

Sacks also called for the cryptocurrency community to view the broader implications of the legislation and the importance of achieving a comprehensive market structure, noting that while yield is essential, it must not obstruct the bigger picture objectives.

While discussions continue, the debate over stablecoin yield has intensified, especially after Brian Armstrong, Coinbase’s CEO, announced the company’s withdrawal of support for the CLARITY Act due to concerns about its current provisions.

In addition to regulatory proposals, there is ongoing concern among banks about how stablecoin yields might divert deposits from traditional banking, raising questions about the future of the banking sector amidst these evolving technologies.