For more than two decades, the $25,000 minimum equity requirement loomed over retail like a barrier to the VIP section of the presitgious Day Traders Club. You either had the cash or you didn't get in. On April, 2026, the SEC quietly pulled that barrier down. The club is now open to all, but with some risks to entry.

 

The commission approved FINRA's sweeping overhaul of Rule 4210, formally eliminating the Pattern Day Trader (PDT) designation that has governed margin accounts since 2001. Under the old framework, any trader who executed four or more same-day round-trips within a rolling five-business-day window got slapped with the PDT label, and with it, a mandatory $25,000 account minimum. Miss that threshold and your broker locked you out until your balance recovered. It was deeply unpopular among smaller retail participants.

 

A Relic From the Dot-Com Era

The rule traces its origins to the wreckage of the dot-com bust. In 2001, regulators watched retail traders pile into overvalued tech stocks on margin, and when the bubble popped, the losses were severe. The $25,000 requirement was meant as a capital buffer, a way of ensuring that anyone placing rapid, leveraged bets had enough cushion to absorb the blowback. And the logic made some sense.

 

What it didn't account for was what markets would look like 25 years later. Commission-free trading arrived. Fractional shares went mainstream. Zero-day-to-expiration options exploded in popularity. According to Cboe Global Markets, 0DTE SPX options averaged 2.3 million contracts daily in 2025 and accounted for 59% of total S&P 500 index options volume, a fivefold jump in three years. Retail traders now represent roughly 50 to 60% of that activity. The old PDT rule wasn't built for any of this. The market has evolved and the rules need to evolve with it.

 

What Replaces It

The new framework ditches the trade-counting approach entirely and moves to a risk-based intraday margin model. Rather than flagging accounts based on how many trades they execute, brokers will now be required to maintain real-time margin calculations tied to a trader's actual position exposure. The SEC has essentially acknowledged what critics argued for years: a trader with $5,000 taking modest, well-hedged positions isn't necessarily more dangerous than one with $50,000 swinging leveraged concentrated bets.

 

FINRA's updated standards mandate that member firms implement algorithmic circuit breakers capable of blocking or liquidating trades the moment an account's margin deficit exceeds its available collateral. It's a more sophisticated system, arguably better calibrated to modern risk than a fixed dollar threshold written when broadband internet was still a luxury.

 

Full rollout across all brokerage platforms is expected to take time, with industry observers projecting implementation timelines stretching from mid-2026 into 2028 for some firms. That said, several retail-focused platforms have already signaled plans to debut PDT-free account structures as early as May 2026. Robinhood shares jumped roughly 7.8% and Webull climbed around 8.9% in the immediate aftermath of the SEC's announcement.

 

The Bitcoin Angle

The PDT rule never technically applied to crypto markets. Bitcoin trades 24/7 on venues that operate outside the traditional brokerage framework, which is why many retail crypto traders have never encountered it. But the practical implications of this regulatory shift for digital assets are hard to ignore.

 

The same retail cohort that speculates in 0DTE options and meme stocks is also the crowd most active in Bitcoin. With the $25,000 barrier removed from traditional markets, that capital doesn't necessarily stay put. Traders newly freed to day trade equities aggressively might also rotate liquidity into crypto, particularly during periods when Bitcoin's intraday swings regularly exceed 3 to 5%. The asset currently trades around $74,500 and commands roughly 59% dominance across a $2.54 trillion crypto market cap.

 

There's also a broader structural point. The PDT elimination signals a new regulatory positioning that favors market access over capital gatekeeping. That's a big shift that is worth watching, particularly as the SEC and other agencies continue to shape how crypto products, broker-dealers, and retail custody arrangements get regulated in the years ahead.

 

Risks Haven't Gone Away

Critics of the rule change aren't hard to find. Consumer protection advocates point out that the $25,000 threshold, whatever its flaws, did filter out inexperienced traders who might otherwise blow up small accounts on leveraged intraday positions. The dynamic margining model is more nuanced, but it also places more responsibility on brokers to enforce risk controls in real time, and on traders to understand what they're actually doing.

 

For firms with institutional-grade margin infrastructure already in place, this is a competitive advantage. For consumer apps that bolted on trading features as an afterthought, meeting the new real-time risk monitoring requirements is going to require meaningful investment. Not every platform is going to get this right immediately.

 

But for retail traders themselves, the opportunity is real, but so is the downside. The PDT rule never stopped people from losing money. It just slowed down how fast some of them could do it. The new framework removes a structural barrier, not the underlying risk of trading frequently in volatile markets with leverage.

 

Most Fed chair nominations generate debate about interest rate philosophy, inflation targets, and balance sheet management. Kevin Warsh's confirmation is going to involve a lot of that, sure, but it is also going to involve a fairly lengthy conversation about DeFi lending protocols, Ethereum Layer 2 networks, and a Bitcoin Lightning Network startup.

 

Warsh, President Trump's nominee to chair the Federal Reserve, cleared the last bureaucratic hurdle before his Senate confirmation hearing when he submitted his required financial disclosure to the U.S. Office of Government Ethics. The filing reveals combined assets with his wife of at least $192 million. But it's the crypto positions scattered throughout the document, held through a web of venture fund structures, that are drawing the most attention from the digital asset industry right now.

 

Not Just A Casual Holder

Warsh did not just pick up some bitcoin through a Coinbase account during the 2021 bull run and forget about it. Through two fund structures, DCM Investments 10 LLC (via a vehicle called Abstract Holdings) and a series of funds labeled AVF I, AVF II, AVF III, and AVGF I and II, he holds equity positions in more than two dozen blockchain and digital asset companies. The breadth is notable: DeFi lending, decentralized derivatives, Layer 1 and Layer 2 networks, prediction markets, crypto neobanks, and Bitcoin payments infrastructure.

 

On the DeFi and trading side, the portfolio includes Compound, one of the foundational algorithmic crypto lending protocols, alongside dYdX, a decentralized derivatives exchange, and Lighter, a decentralized exchange protocol. On the infrastructure side, he has exposure to Solana, the high-throughput Layer 1 blockchain, Optimism and Blast, two Ethereum scaling networks, and Zero Gravity, a Layer 2 AI blockchain platform. Bitcoin-specific holdings include Flashnet, a Lightning Network trading platform, and a direct position in the Lightning Network itself.

 

There are also positions in Polychain and Scalar Capital, two prominent crypto investment firms, plus Polymarket, the prediction market platform, and several crypto-enabled neobanks including OnJuno and Lemon Cash. Rounding it out: Dapper Labs (best known for NBA Top Shot), Friends With Benefits, a Web3 community platform, and Crossmint, an NFT developer tools company. Warsh also previously held a stake in Bitwise Asset Management, the issuer of one of the spot Bitcoin ETFs, though that position does not appear in the current filing.

 

Selling liquid token positions is straightforward. Unwinding LP stakes in Polychain or venture fund structures is not, and federal ethics rules generally impose a one-year cooling-off period on matters directly affecting recently divested financial interests. That creates a potentially awkward situation given what the Fed has on its plate.

 

Congress is actively working through stablecoin legislation that would define which institutions can issue and custody stablecoins, directly affecting DeFi protocols and crypto neobanks of the type in Warsh's portfolio. The Fed's supervisory stance on whether banks can custody digital assets remains one of the most contested open questions in the industry. And while political appetite for a U.S. CBDC has cooled considerably, the Fed's ongoing research in that area intersects with the payment network infrastructure Warsh holds exposure to through Lightning Network and Solana.

 

Could Be Some Complications

The broader financial profile adds another layer. Warsh earned $10.2 million in consulting fees from Duquesne Family Office, the investment arm of Stanley Druckenmiller, one of the more prominent macro investors in the crypto space. Additional consulting income came from GoldenTree Asset Management ($1.55 million), Cerberus Capital Management ($750,000), and Brevan Howard ($750,000), all firms with meaningful digital asset trading operations. His speaking fee circuit in just the first half of 2025 alone topped $780,000 from firms including TPG, State Street, and Warburg Pincus. Combined with spouse Jane Lauder's estimated $1.9 billion net worth, Warsh would enter the Fed as one of the wealthiest chairs in the institution's modern history.

 

Senate Banking Committee chair Tim Scott said Tuesday that a confirmation hearing is scheduled for next week. However, Senator Thom Tillis of North Carolina is blocking any final vote until the Justice Department drops its criminal investigation of current Fed Chair Jerome Powell, whose term expires May 15. The crypto portfolio will almost certainly come up in questioning.

 

On one hand, a Fed chair who has personally sought out exposure to DeFi protocols and blockchain infrastructure is unlikely to approach crypto with the indifference or hostility that has characterized past leadership. On the other, the mandatory divestiture and recusal obligations could actively limit his ability to influence policy in the industry's favor during his first year in office, precisely when some of the most consequential regulatory decisions are expected to land. It is a double-edged sword, and the confirmation hearing will be the first real test of how Warsh plans to navigate it.

 

The Federal Deposit Insurance Corporation (FDIC), the primary insurance body for bank deposits in the United States, has recently moved to regulate FDIC supervised stablecoin issuers in accordance with the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act.

 

The agency, in a recent press release, announced that its board of directors had approved a Notice of Proposed Rulemaking to implement key provisions under the GENIUS Act.

 

According to the FDIC, this proposal would provide a prudential framework for permitted payment stablecoin issuers under its supervision, setting standards with regard to stablecoin reserve assets, redemption, capital, liquidity, and risk management that will be uniformly adhered to by all FDIC supervised stablecoin issuers.

 

The proposal will also establish requirements for FDIC supervised permitted payment stablecoin issuers and insured depository institutions that provide certain payment stablecoin related custodial and safekeeping services.

 

All entities under FDIC supervision, including permitted payment stablecoin issuers, which are entities legally approved to issue stablecoins in the United States, and insured depository institutions, which include banks and other federally insured financial institutions, must comply with this new FDIC stablecoin prudential rule if they are engaged in issuing stablecoins or providing related services.

 

Although the FDIC insures deposits at more than 4,000 financial institutions in the United States and supervises more than 2,700 banks, there are currently no approved permitted payment stablecoin issuers or insured depository institutions operating under this specific framework. Approval would only follow once the proposal becomes a final rule, after which entities may begin applying for supervision under the FDIC.

 

For the proposal to become a rule, it must be released for public comment, which has already occurred, with a 60-day window provided for feedback. After the 60-day window elapses, the FDIC will review the comments and feedback and make any necessary adjustments based on the public response.

 

The Office of the Comptroller of the Currency, the Federal Reserve, and, in some cases, the Treasury Department may be invited to review the final proposal to ensure it does not conflict with existing banking and financial laws. After this review, the FDIC board may approve it as a final rule, after which it is published in the Federal Register.

 

What happens after the proposal becomes law?

Upon the proposal becoming law, banks and other eligible financial institutions can then apply for designation as a Permitted Payment Stablecoin Issuer (PPSI) under FDIC supervision. The application is reviewed and either approved or denied by the FDIC within a period of 120 days. 

 

The FDIC will also regularly review the capital, reserves, risk controls, and compliance systems of these approved entities to ensure they are safe to operate.

 

 

Apple has removed Bitchat, a decentralized peer-to-peer messaging app, from its App Store in China for allegedly violating the country’s internet service regulations.

 

In a Sunday post on X, Jack Dorsey, former CEO and co-founder of Twitter, now known as X, shared a screenshot he received from Apple’s review team in February informing him about the removal of his Bitchat app from the China App Store.

 

 

The removal of the app follows a request from the Cyberspace Administration of China, the main government agency in China responsible for controlling and regulating the internet. The Cyberspace Administration of China alleges that Bitchat violates Article 3 of the Provisions on the Security Assessment of Internet-based Information Services, one of the agency’s key internet compliance rules.

 

Since its launch in July 2025, the Bitchat app has grown increasingly popular, especially in regions affected by unrest. Madagascar, Nepal, and Uganda have each recorded several tens of thousands of downloads when the governments of these countries shut down internet service during times of civil crisis. Google Play Store has also recorded over one million downloads, with a user rating above four out of five.

 

China considers blockchain-based lending for traditional finance

Despite the ban on Bitchat and China’s strict rules on digital assets and crypto-related activities, the country continues to push forward with blockchain-based innovation and development.

 

Recently, two of China’s core tax and financial regulators, the State Taxation Administration and the National Financial Regulatory Administration, have urged banks and other financial institutions to incorporate blockchain technology into their lending and credit services. The agencies reiterated the benefits of blockchain in standardizing data and improving transparency among tax authorities, banks, and enterprises.

 

This recommendation aligns with the National Development and Reform Commission’s goal of integrating blockchain into key national infrastructure. In January 2025, the commission, one of China’s top economic planning bodies, released a blockchain-powered data infrastructure roadmap. The plan aims to leverage blockchain technology to build a national digital data infrastructure that could attract about 400 billion yuan, or 58 billion dollars, in investments each year.

 

The commission is currently in the first phase of the roadmap, which focuses on developing core blockchain infrastructure and establishing standardized protocols. The next stages will involve integrating and scaling these blockchain protocols across different sectors of the country’s infrastructure.

 

 

 

Something shifted in Washington on Friday, and the people who have been watching the CLARITY Act back and forth for months could feel it. Two key lawmakers, Republican Thom Tillis of North Carolina and Democrat Angela Alsobrooks of Maryland, reached an agreement in principle on one of the most stubbornly contested provisions in the bill: stablecoin yield. It is the kind of deal that, when the details finally shake out, may well be remembered as the moment the United States stopped kicking the crypto regulatory can down the road.

 

The news broke late Friday and was first reported by Politico. Senator Alsobrooks confirmed it plainly. "Sen. Tillis and I do have an agreement in principle," she said. "We've come a long way. And I think what it will do is to allow us to protect innovation, but also gives us the opportunity to prevent widespread deposit flight." The White House's crypto executive director, Patrick Witt, called it a "major milestone" and added that more work remains, but that progress toward passing the CLARITY Act was now real and tangible.

 

Senator Cynthia Lummis, the Wyoming Republican who chairs the Senate Banking Committee's crypto subcommittee and has been one of the most tireless advocates for this legislation, marked the occasion in her own way. She posted a photo on X of a "yield" sign. No caption needed.

 

 

The Stablecoin Yield Standoff, Explained

For months, the stablecoin yield question was the immovable object blocking the CLARITY Act from getting its Senate Banking Committee hearing. 

 

The GENIUS Act, signed into law by President Trump in July 2025, prohibits stablecoin issuers from paying interest directly to holders. The intent was to prevent stablecoins from functioning as de facto bank deposit accounts, which would put them in direct competition with traditional savings products and, as the American Bankers Association argued loudly, threaten deposit flows into community banks. The concern: if Coinbase or another platform could offer users 4% on their dollar-pegged tokens simply for holding them, why would anyone keep money in a checking account?

 

The problem is that the GENIUS Act only covered issuers. It left a gap for third-party platforms that might offer rewards to customers who hold stablecoins on their systems. The ABA saw this as a loophole and spent months in Washington lobbying to close it. Crypto companies, for their part, said those rewards programs were fundamentally different from deposit interest and should be allowed.

 

Section 404 of the Senate Banking Committee's draft tried to thread this needle. It prohibits digital asset service providers from paying interest or yield "solely in connection with the holding of a payment stablecoin," while explicitly allowing "activity-based" rewards tied to transactions, payments, platform use, loyalty programs, liquidity provision, and other behaviors. The distinction is real: a reward for moving money through a system is not the same thing as interest paid for parking money in one.

 

Senator Mike Rounds, a South Dakota Republican on the Banking Committee, captured the nuance at an ABA summit earlier this month: rewards cannot be simply about how much money sits in an account, but they might reasonably be tied to how active that account is. "We're trying to reflect that in the discussions," he said.

 

Lummis had suggested the final compromise would disallow anything that "sounds like banking product terminology" and bar rewards tied to the size of a user's balance. Coinbase CEO Brian Armstrong, whose withdrawal of support in January helped torpedo a scheduled markup hearing, has been described by Lummis as "really pretty good about being willing to give on this issue."

 

 

From 99% to Done

The past week has been a rapid acceleration. As recently as Thursday, sources familiar with the situation described the stablecoin yield issue as being on the verge of resolution. A closed Senate Republican meeting on Wednesday, attended by White House crypto council director Patrick Witt, produced what Lummis told reporters afterward were significant breakthroughs, with "major light bulbs" switched on among the participants.

 

FinTech Weekly, which has closely tracked the legislative calendar, reported that stablecoin yield negotiations were "99% of the way to resolution" coming out of that meeting. The digital asset provisions of the bill more broadly were described as being in a "good place." The remaining friction, sources said, was not technical but political, specifically around whether community bank deregulation provisions might be attached to the CLARITY Act as part of a broader legislative trade.

 

Then came Friday's agreement. "We've come a long way," Alsobrooks told Politico, with a formality that understated just how much ground has been covered since January, when the scheduled markup hearing collapsed under the weight of over 100 proposed amendments and an industry revolt over the yield language.

 

 

What Comes Next and Why the Timeline Matters

An agreement on yield does not mean the CLARITY Act is done. Several other issues need resolution, decentralized finance remains a live debate, and the bill still needs to clear the Senate Banking Committee before it can go to a full Senate vote. After that, it must be reconciled with the version that passed the Senate Agriculture Committee in January. And before the President can sign it, that combined Senate text has to be reconciled with the House-passed version from July 2025. 

 

But the clock is ticking here. Senate Majority Leader John Thune controls the floor calendar, and it is crowded. Unrelated fights, including the Republican voter-ID bill and ongoing debate over the situation in Iran, are competing for limited floor time. Haun Ventures CEO Katie Haun, in a CNBC interview Friday, put it directly: "The big question on the Clarity Act is, is Congress going to get a bill to the floor on time to vote?"

 

Lummis has said she expects a Banking Committee hearing in the latter half of April, after the Easter recess. Advocates have been hoping for a May resolution. Prediction markets are currently pricing the odds of the CLARITY Act being signed in 2026 at around 72%, according to FinTech Weekly. Treasury Secretary Scott Bessent has described passage as a spring 2026 target. Ripple CEO Brad Garlinghouse has put the odds at 80 to 90%.

 

JPMorgan analysts have described CLARITY Act passage by midyear as a positive catalyst for digital assets, pointing to regulatory clarity, institutional scaling, and tokenization growth as the key drivers. The crypto industry committed nearly $150 million to the Fairshake political action committee in the current cycle and announced a $193 million war chest around the Agriculture Committee markup in January. The companies behind that spending are waiting.

 

 

What This All Means

The stakes of the CLARITY Act extend well beyond Senate procedure. Markets are waiting. Institutions that have been slowly building out crypto infrastructure, custody solutions, tokenized asset offerings, trading desks, need to know what the rules are before they can fully commit capital and resources. The SEC's interpretation helps, but as Atkins himself acknowledged, it is not a substitute for law.

 

The CLARITY Act, if signed, would give the CFTC clear jurisdiction over most digital asset spot markets, create a path to register exchanges and brokers, establish consumer protections with real enforcement teeth, and provide the kind of statutory framework that companies can build businesses around. It would, in the language of its Senate Banking Committee sponsors, establish the United States as the crypto capital of the world, not just by rhetoric but by law.

 

If the bill fails this year, the status quo continues. Crypto companies operate under regulatory uncertainty. The SEC retains broad discretion to treat digital assets as securities. Institutional adoption continues but without a clear statutory framework. And the crypto lobby, which has made clear it will treat failure as a political liability, turns its $193 million war chest into something that looks a lot more like electoral pressure.

 

Friday's agreement does not guarantee passage. It does something important though. It removes the single biggest substantive obstacle to moving forward. The stablecoin yield question, which derailed a January markup hearing and has consumed months of negotiations, now has a resolution in principle. The path ahead still has obstacles, but for the first time in a while, it looks like an actual path.

 

Senators Tillis and Alsobrooks just handed the crypto industry something it has been asking for since the last bull market: a credible signal that Washington is finally going to do its job. The deal is in principle, the details are not yet public, and there is still legislative work ahead. But after years of false starts, shelved bills, collapsed markup hearings, and agency standoffs, this is the moment the trajectory changed.

 

 

Senator Cynthia Lummis, the Wyoming Republican who chairs the Senate Banking Committee's digital assets subcommittee and has spent the better part of two years shepherding the crypto industry's most ambitious legislative goal, walked into the Digital Chamber's DC Blockchain Summit and told a packed room what a lot of people in the industry had stopped expecting to hear.

"We think we've got it," she said. "We really are going to get it out of the banking committee in April."

That's a bigger deal than it might sound. The Digital Asset Market Clarity Act, the comprehensive crypto framework that cleared the House in a 294-134 bipartisan vote back in July 2025, has been grinding through Senate committees ever since, chewing through months of negotiations, a January markup that collapsed hours before it was scheduled to begin, and a dispute over stablecoin yield that managed to put banking lobbyists, crypto firms, and Democratic senators all at odds simultaneously. For a while, it looked like the whole thing might just quietly die before the 2026 midterms swallowed the calendar.

Apparently not, if Lummis is certain on the new deal being made.

 

The Stablecoin Yield Fight, Explained
To understand how we got here, it helps to understand the fight that almost killed this bill. After the House passed its version, the Senate Banking Committee got to work on its own draft. In January 2026, committee staff released a 278-page bill that took a firm stance: digital asset service providers could not offer interest or yield to users simply for holding stablecoin balances, though rewards or activity-linked incentives were still on the table.

Banking groups hated the carve-out. The American Bankers Association lobbied hard against any yield provision, arguing that if crypto platforms could pay customers to hold stablecoins, those customers might pull deposits from community banks. Coinbase, meanwhile, had built a profitable stablecoin rewards program and wasn't eager to see it legislated away. Coinbase CEO Brian Armstrong reportedly signaled opposition to an early compromise attempt, and within hours of the January 14 scheduled markup, committee leadership postponed it indefinitely.

That delay rattled markets, contributed to what analysts at CoinShares estimated as nearly $1 billion in crypto market outflows, and sent lobbyists back to their whiteboards.

The White House held at least three separate meetings over the following weeks to try to broker a deal. And now, Lummis says, a compromise has landed. Crypto platforms will not be able to offer rewards programs using language that sounds like banking products, whether that means using terms like "yield," "interest," or anything that ties payouts to how much a user holds rather than what they do.

"Anything that sounds like banking product terminology will not appear," Lummis said. She added that Armstrong had been "really pretty good about being willing to give on this issue," a notable shift from his earlier posture.

Senator Bernie Moreno, a Republican on the committee, confirmed the trajectory in a video statement at the same event, saying Senators Angela Alsobrooks, a Democrat, and Thom Tillis, a Republican, are in the final stages of the stablecoin talks alongside the White House. "Once they all sign off," Moreno said, it's "go time."

 

DeFi Disputes Quietly Shelved
DeFi was the other thing that kept lobbyists up at night. Decentralized finance protocols, which allow users to lend, borrow, and trade digital assets without going through a traditional intermediary, sit in a legal grey zone that both Democrats and Republicans approached with very different instincts.

Democrats wanted oversight that was on par with federally regulated financial firms. The crypto industry, somewhat predictably, wanted software developers and peer-to-peer activity protected from being treated as financial intermediaries. The House version of the bill had already tried to thread this needle by drawing a line between control and code: developers who publish or maintain software without directly handling customer funds would not be classified as financial intermediaries. Centralized entities that interact with DeFi protocols would face tailored requirements.

According to Lummis, those DeFi disagreements have been "put to bed." She didn't go into detail, but Senate Banking Committee materials describe the bill's approach as targeting control rather than code, and requiring risk management and cybersecurity standards for centralized intermediaries that touch DeFi, while leaving non-custodial software development out of scope.

 

The Ethics Problem Won't Go Away
Not everything is resolved. Senator Kirsten Gillibrand, a New York Democrat who has been one of Lummis's most consistent bipartisan partners on crypto legislation over the years, made clear at the same summit that there is still a major outstanding demand from her caucus.

Democrats want the bill to include an explicit ban on senior government officials personally profiting from the crypto industry. The reasoning for this is not very subtle, especially in heated partisanship of Washington these days: President Donald Trump and his family are tied to World Liberty Financial, a crypto platform that launched a stablecoin last year, and Trump's crypto-linked ventures have given Democrats a consistent line of attack.

"It's very important that we include this," Gillibrand said on Wednesday, adding that no government official in Congress or the White House should "get rich off their position and their knowledge base." Including such a restriction, she argued, would "unlock many more votes" from Democrats.

Lummis has previously said she took a compromise ethics provision to the White House and was rebuffed. Trump administration officials have repeatedly stated that the president's family's participation in digital asset businesses does not represent an inappropriate conflict of interests. The practical read from lobbyists: Republicans are unlikely to pass language that targets the leader of their own party.

The House bill, for its part, does include language specifying that existing ethics statutes already bar members of Congress and senior executive branch officials from issuing digital commodities during their time in public service. Whether that satisfies Democrats in the Senate is another matter.

 

Where the Bill Stands Procedurally
The legislative path from here still has a few moving parts. The Senate Agriculture Committee cleared its version of a crypto market structure bill, the Digital Commodity Intermediaries Act, in late January 2026. That bill covers the CFTC-related side of the regulatory picture, including commodity market oversight, exchange registration, and derivatives. It passed over the objections of Democratic members who tried and failed to push through a series of amendments.

The Senate Banking Committee bill, now expected to go through a markup in late April after the Easter recess, would handle the SEC-related provisions: investor protections, securities treatment of digital assets, and stablecoin regulation. Once it clears that committee, both Senate bills need to be reconciled and merged before heading to a full Senate floor vote. That combined version would then need to be aligned with the House-passed CLARITY Act before a single final bill could reach Trump's desk.

That's a lot of steps. Lummis, who announced in December that she will not seek re-election, seems acutely aware of the time pressure. "This may be our only chance to get market structure done," she posted on X on Wednesday. Moreno was even more pointed: "If we don't get the CLARITY Act passed by May, digital asset legislation will not pass for the foreseeable future."

The Senate's 2026 calendar is not working in the bill's favor. The midterm elections in November mean that floor time effectively closes for controversial legislation sometime around August, when lawmakers shift their attention to their races. A Senate majority that currently tilts Republican could flip to Democratic control after the vote, bringing new leadership to key committees and potentially shelving the bill for another cycle.

Making things more unpredictable, both parties are currently tangling over unrelated legislation and the U.S. involvement in the war in Iran, which threatens to consume floor time that crypto advocates would prefer to use for a market structure vote. Senate Majority Leader John Thune said as recently as last week that he did not expect the Banking Committee to pass the bill quickly. Whether that assessment holds is now up to the negotiators.

Prediction markets have priced the odds of the bill being signed into law in 2026 at around 72%, according to available data. JPMorgan analysts have described passage before midyear as a positive catalyst for digital assets, citing regulatory clarity, institutional scaling, and tokenization growth as key drivers. Ripple CEO Brad Garlinghouse has put his personal odds estimate even higher, at 80 to 90%.

Industry Money and Political Pressure
The stakes are reflected in the lobbying numbers. Total crypto industry lobbying expenditures topped $80 million in 2025. Fairshake, the industry's primary political action committee, had built a 2026 war chest of $193 million as of January, with Coinbase, Ripple, and Andreessen Horowitz each contributing $24 to $25 million in the second half of last year alone. The day before the Senate Agriculture Committee's January markup, Fairshake made that announcement public.

For all the money, the legislative process has been messier than the industry hoped. A bill that many expected to be done before year-end 2025 is now racing a midterm election clock, dependent on a handful of senators reaching agreement on provisions they've been arguing about for months, and navigating a Senate floor schedule that no one fully controls.

Lummis, for her part, sounded more confident than she has in months. "We're going to have this thing done, come hell or high water, before the end of the year," she told the crowd in Washington.

Whether the rest of the Senate, the White House, and the clock agree with her is the only question left.

 

The room at the Marriott Marquis in Washington was full of community bankers on Tuesday, and Senator Angela Alsobrooks walked straight into the lion's den. Speaking at the American Bankers Association's annual Washington Summit, the Maryland Democrat delivered a message neither side particularly wanted to hear: everyone involved in the Digital Asset Market Clarity Act is going to have to walk away a little bit unhappy.

 

It was a remarkably candid thing to say in front of 1,400 people who have spent the better part of three months trying to kill the very provision that's been holding up the bill. But Alsobrooks, along with Republican Senator Thom Tillis of North Carolina, is now the central figure in a late-stage push to get the Clarity Act off the Senate Banking Committee floor and into an actual markup hearing before the legislative window closes for good.

 

The two senators confirmed Tuesday they're actively working on compromise language around stablecoin yield which keeps coming up as the main issue that has stalled what was supposed to be a landmark piece of crypto regulation.

 

A Bill In Limbo

The Digital Asset Market Clarity Act, or CLARITY Act, was supposed to have its Senate Banking Committee markup in January. That session got pulled at the last minute. The reason was stablecoin yield, specifically, amendments co-sponsored by Alsobrooks and Tillis that would restrict crypto firms from offering interest-like returns to customers who simply hold dollar-pegged digital tokens like USDC or USDT.

 

Banks had been lobbying hard against any provision that allowed that kind of reward. Their argument, which they've pushed loudly and repeatedly, is that stablecoins offering yield would function like bank accounts without the regulatory obligations of bank accounts. Executives at JPMorgan and Bank of America have cited Treasury Department modeling that suggested banks could lose up to $6.6 trillion in deposits if stablecoin yield programs went mainstream. Their argument is that it would starve the lending market and ultimately destabilize smaller regional banks that are particularly dependent on deposit funding.

 

The crypto industry dismisses most of that as fearmongering. Coinbase CEO Brian Armstrong called out the banking lobby publicly for what he characterized as anticompetitive blocking tactics and has pulled his support for the bill. In January at Davos, JPMorgan's Jamie Dimon reportedly told Armstrong he was, in quite colorful terms, wrong. The anecdote leaked out and became something of a symbol for just how personal this fight had gotten.

 

 

The White House Steps In, Then Gets Rejected

By late February, the White House had grown impatient. Administration officials spent weeks brokering what they hoped would be an acceptable middle ground: allow stablecoin yield in limited contexts, particularly for activity tied to payments and transactions, while banning rewards on idle balances that look more like savings accounts. Crypto firms signed off on the framework. The banks did not.

 

On March 3rd, President Trump went public with his frustration. In a Truth Social post, he wrote that banks should not be trying to undercut the GENIUS Act or hold the CLARITY Act hostage, a shot across the bow that was notable both for its directness and for the fact that it did essentially nothing to move the American Bankers Association. Two days later, the ABA formally rejected the White House compromise anyway.

 

The March 1st deadline the White House had set for a resolution passed without published compromise text. Prediction markets, which had briefly priced Clarity Act passage at around 80% odds, fell back toward 55% as the stalemate hardened.

 

What the ABA rejection didn't do, however, is kill the legislation outright. Congress has passed bills over banking lobby opposition before. The question, as analysts and lobbyists have been pointing out all week, is whether there are enough Senate votes to do it again — and whether the calendar allows the time to find out.

 

Can We Get A Compromise?

The emerging deal that Alsobrooks and Tillis are proposing is a slimmed-down version of what the White House tried. Under the framework being discussed, yield on stablecoin holdings that closely resemble bank deposits would remain prohibited. But rewards tied to specific activities, like using stablecoins for payments or transactions on a given platform, could remain eligible for some form of customer incentive.

 

Both senators and many crypto advocates actually agree on the premise that pure holding rewards that look and function like savings account interest are a problem. The dispute is over where exactly to draw the line and how to define the categories well enough that neither side can game them after the fact.

 

Cody Carbone, the CEO of the Digital Chamber, said this week that Tillis has been very receptive to discussions about stablecoin yield and that he's optimistic the industry can get to yes on the bill. Summer Mersinger, the CEO of the Blockchain Association, noted that the White House weighing in on the negotiations and pushing banks to engage in good faith adds important momentum as talks continue.

 

The banks have maintained, publicly at least, that those assurances aren't enough. Their representatives at the ABA summit this week underlined again what they see as the risks of any yield loophole to their business model. The question of whether a markup hearing happens in late March or gets delayed again, depends entirely on whether Alsobrooks and Tillis can produce language the committee will actually vote on.

 

Timing Is An Issue

Behind every conversation about the Clarity Act this week is an unspoken anxiety about time. The Senate calendar is tight. Midterm elections are in November, and lawmakers will start dispersing from meaningful legislating sometime around May or June as campaign season accelerates. Unfortunately it seems, Congress prefers to stop working as they try to convince voters to keep them in their jobs. I know, makes perfect sense. If a markup isn't held and a floor vote isn't scheduled by sometime in April, realistically the bill is looking at the next Congress which could be a completely different party in power. And complicating things even more. Despite which party ends up winning the midterms, this could mean another 12 to 18 months of regulatory uncertainty for an industry that has been waiting years for a clear legal framework.

 

That timeline matters not just for the crypto industry's domestic ambitions, but for its competitive positioning globally. Under the European Union's MiCA framework, stablecoin yield products that are restricted or banned in the U.S. are already legal in European jurisdictions. Coinbase and others have been explicit about the risk that continued regulatory ambiguity in the U.S. will push capital, talent, and product development offshore. Trump made a version of the same argument in his Truth Social post last week, warning that failure would drive the industry to China.

 

There's also a strategic Bitcoin Reserve angle sitting quietly in the background. According to people familiar with the situation, the Trump administration has determined it needs congressional action to operationalize the planned Strategic Bitcoin Reserve that the president signed an executive order for over a year ago. That creates at least some White House motivation to see the broader Clarity Act process succeed.

 

What Happens Next

The Senate Banking Committee is targeting a late-March markup. Whether that happens depends on whether the Alsobrooks-Tillis compromise language satisfies enough members to call the vote. If it does, the bill would then need to be merged with a version that already passed the Senate Agriculture Committee on a party-line vote in late 2025. The combined text would require significant Democratic support to clear a full Senate vote, always a tall ask in the current politcal environment and the fact that seven Democratic senators have separately raised concerns about potential conflicts of interest involving senior government officials, including the president himself, who have financial ties to the crypto industry.

 

Even if the Senate acts, the bill still needs the House, where an earlier version of the CLARITY Act passed committee last year but has yet to reach the floor. The path to a signed law before November is narrow but not impossible. It requires the Senate Banking Committee to move in the next few weeks, the combined bill to hold together politically, and a Senate floor schedule that is packed with little wiggle room.

 

For the moment, all of it hinges on two senators and a room full of bankers in Washington D.C., trying to decide how much compromise is actually compromise and if they can all agree to leave a bit unhappy about the results for the greater good. Typically the best compromises do make both sides a bit unhappy. In Washington, that usually means the deal is closer than it looks. It also usually means it's harder than it sounds.

 

After nearly three years of legal battle, the U.S. Securities and Exchange Commission officially dismissed its civil fraud claims against Tron founder Justin Sun, the Tron Foundation, and the BitTorrent Foundation on Thursday. The resolution, entered by the U.S. District Court for the Southern District of New York, comes with one notable condition: Rainberry Inc., the entity that developed the BitTorrent protocol and the BTT cryptocurrency token under Sun's direction, agreed to pay a $10 million civil penalty to the agency.

 

The final judgment still requires approval from a federal judge, but the terms represent a clean exit from what had been one of the higher-profile enforcement actions of the Gensler-era SEC. Rainberry, previously known as BitTorrent Inc. and acquired by Sun in June 2018, will also be permanently barred from engaging in deceptive market practices for securities, though it did not admit guilt as part of the agreement. Critically, the dismissal against Sun himself and the two foundations was entered "with prejudice," meaning the SEC cannot refile the same allegations in this federal court.

 

 

A Case History

The commission first filed the lawsuit in March 2023, during former Chairman Gary Gensler's tenure. The charges were sweeping. The SEC accused Sun and his related entities of orchestrating the unregistered offer and sale of two crypto assets, Tronix (TRX) and BitTorrent (BTT), which it classified as securities. Beyond that, regulators alleged Sun personally directed employees to execute hundreds of thousands of coordinated wash trades in TRX, generating roughly $31 million in artificial trading proceeds and inflating the appearance of legitimate market activity. The complaint also alleged Sun paid celebrity endorsers to promote his tokens without publicly disclosing those payments — a violation of securities laws that require such arrangements to be made transparent to investors.

 

The SEC argued that Sun had tight personal control over each of the entities involved, calling Tron Foundation, BitTorrent Foundation, and Rainberry his "alter egos" and noting that he had spent significant time on U.S. soil during the relevant period, including approximately 180 days in 2019 alone. The agency said a reasonable investor would have seen Sun as the unified face of the entire TRX and BTT ecosystem.

 

Sun's legal team did not take the charges quietly. In early 2024, Tron Foundation and Sun's lawyers moved to dismiss the suit on jurisdictional grounds, arguing that the SEC had no authority over Sun as a foreign national residing abroad and that the agency had failed to prove Sun exercised meaningful control over the Tron and BitTorrent networks. Rainberry, incorporated in California, did not contest jurisdiction but sought dismissal on different grounds — primarily that the company had no fair notice that its activities could be subject to securities claims.

 

The SEC pushed back on those arguments aggressively in an amended complaint filed in April 2024, countering that Sun's physical presence in the United States over multiple years was extensive and well-documented, and that his dominance over each entity was impossible to dispute given his public profile and behavior at industry events.

 

By late 2024 and early 2025, the political climate had shifted dramatically. Donald Trump's return to the White House brought with it a sharp reversal in the SEC's posture toward crypto enforcement. Gary Gensler stepped down, and the commission came under the acting leadership of Commissioner Mark Uyeda before Paul Atkins, a Washington lawyer widely seen as supportive of the digital asset industry, was confirmed as chairman. In February 2025, the SEC and Sun's legal team jointly asked Judge Edgardo Ramos in Manhattan to put the case on hold while both sides explored a potential resolution, citing the interests of both parties and the public.

 

 

What Comes Next For Tron and Sun

The resolution closes a legal chapter, but Sun's year has not been without turbulence. The relationship with World Liberty Financial grew complicated in September 2025 when, days after WLFI tokens became publicly tradable, blockchain data revealed that Sun's wallet address holding roughly 595 million unlocked WLFI tokens was blacklisted by the project's smart contracts. WLFI had fallen sharply from its debut price, and on-chain data showed Sun had made several outbound transfers, including one worth approximately $9 million, to addresses associated with exchanges. The WLFI team cited concerns about suspicious activity. Sun denied any manipulation, publicly appealing to the team to restore his access and invoking the decentralization principles the project claimed to champion. As of late 2025, his tokens reportedly remained frozen and had declined significantly in value.

 

For the Tron and BitTorrent ecosystems themselves, the dismissal removes a substantial legal overhang. TRX and BTT holders had long operated under uncertainty about whether the tokens could ultimately be classified as securities in federal court. While the settlement does not resolve broader policy debates in Washington about how digital tokens should be classified, it does remove the specific threat of a federal court ruling in this case.

 

The $10 million Rainberry penalty is notable primarily for what it is not. Given the scale of what was alleged, including hundreds of millions of dollars in token distributions and deliberate wash trading to manipulate market prices, the fine is modest. Critics are likely to point to the figure as further evidence that the current SEC has little appetite for meaningful accountability in the crypto space, while supporters of the settlement structure will argue it brings resolution without years of additional litigation that may have yielded uncertain outcomes anyway.

 

For Sun, the outcome is a practical victory, even if the legal-ese technically routes the penalty through Rainberry rather than through him directly. He emerged without personal liability in a case where the SEC had once described him as the singular controlling force behind everything. Whether the political dynamics that contributed to that outcome constitute a coincidence or something more transactional is a question that Senate and House oversight committees appear intent on pressing in the months ahead

 

 

 

Washington's stablecoin standoff just got a whole lot more personal.

 

Patrick Witt, the executive director of the President's Council of Advisors for Digital Assets, publicly fired back at JPMorgan Chase CEO Jamie Dimon on Tuesday, calling his arguments about stablecoin yields misleading and, in Witt's own word, a "deceit."

 

The exchange marks one of the sharpest moments yet in a months-long tug-of-war between Wall Street and the White House over the future of digital asset regulation in America.

 

Dimon Draws a Line in the Sand

It started Monday, when Dimon went on CNBC and didn't mince words. His position was simple, if uncompromising: any platform holding customer balances and paying interest on them is functionally a bank, and should be regulated like one.

 

"If you do that, the public will pay. It will get bad," Dimon warned, arguing that a two-tiered system where crypto firms operate with fewer restrictions than banks is unsustainable.

 

Dimon suggested a narrow compromise: platforms could offer rewards tied to transactions. But he drew a clear line at interest-like payments on idle balances, saying, "If you're going to be holding balances and paying interest, that's a bank."

 

The list of obligations Dimon believes should apply is long, FDIC insurance, capital and liquidity requirements, anti-money laundering controls, transparency standards, community lending mandates, and board governance requirements. "If they want to be a bank, so be it," he said.

 

For Dimon, it's fundamentally about fairness. JPMorgan uses blockchain in its own operations, and the CEO was careful to frame his argument not as anti-crypto but as pro-competition on equal terms. "We're in favor of competition. But it's got to be fair and balanced," he said.

 

 

The White House Fires Back

Witt wasn't going to let that stand. In a post on X late Tuesday, he went directly at Dimon's framing, calling it deliberately misleading.

 

"The deceit here is that it is not the paying of yield on a balance per se that necessitates bank-like regulations, but rather the lending out or rehypothecation of the dollars that make up the underlying balance," Witt wrote. "The GENIUS Act explicitly forbids stablecoin issuers from doing the latter."

 

The argument gets at something technically important. What makes a bank risky, and therefore subject to heavy regulation, isn't that it pays interest. It's that banks take deposits and lend them back out, creating credit and the systemic risk that comes with it. If too many people want their money back at once, that's a bank run. Stablecoin issuers operating under the GENIUS Act must maintain reserves at a 1:1 ratio. There is no fractional reserve lending, no rehypothecation, no credit creation.

 

In Witt's view, stablecoin balances aren't deposits, and treating them as such misrepresents what's actually happening. He closed with a pointed equation: "Stablecoins ≠ Deposits."

 

President Donald Trump didn't stay quiet either. On Tuesday, he took to Truth Social with a message that made his position unmistakably clear.

 

"The U.S. needs to get Market Structure done, ASAP. Americans should earn more money on their money. The Banks are hitting record profits, and we are not going to allow them to undermine our powerful Crypto Agenda that will end up going to China, and other Countries if we don't get the Clarity Act taken care of," Trump wrote.

 

Senator Cynthia Lummis quickly reposted Trump's message, adding her own call to action: "America can't afford to wait. Congress must move quickly to pass the Clarity Act."

 

The same day Trump posted, a Coinbase delegation led by CEO Brian Armstrong visited the White House for talks. The timing was not subtle.

 

The Real Stakes: The CLARITY Act

To understand why this debate matters so much right now, you need to understand the legislation being held hostage by it.

 

The GENIUS Act, signed into law in July 2025, established the first federal framework for payment stablecoins. The CLARITY Act is its sequel: a broader market structure bill that would assign clear regulatory jurisdiction to the SEC and CFTC over the crypto industry, and is widely seen as the piece of legislation needed to unlock large-scale institutional participation in digital assets.

 

The bill cleared the House comfortably but has been mired in Senate gridlock since January, when the Senate Banking Committee indefinitely postponed a planned markup vote. The trigger was Coinbase withdrawing support over a proposed amendment that would have restricted stablecoin rewards for users.

 

That withdrawal, announced by CEO Brian Armstrong in a post on X the night before the scheduled committee vote, split the crypto industry. a16z crypto's Chris Dixon publicly disagreed, posting "Now is the time to move the Clarity Act forward." Kraken's co-CEO Arjun Sethi also pushed back, writing that "walking away now would not preserve the status quo in practice" and warning it "would lock in uncertainty and leave American companies operating under ambiguity while the rest of the world moves forward."

 

The stakes for Coinbase are concrete. Stablecoins contribute nearly 20% of Coinbase's revenue, roughly $355 million in the third quarter of 2025 alone, and most of USDC's growth is occurring on Coinbase's platform. Coinbase currently offers 3.5% yield on USDC, a figure most traditional bank accounts can't come close to matching.

 

 

Banks Are Scared, and They Have the Numbers to Show It

The banking lobby's concern isn't hypothetical. Banking trade groups, led by the Bank Policy Institute, have warned that unrestricted stablecoin yield could trigger deposit outflows of up to $6.6 trillion, citing U.S. Treasury Department analysis. Bank of America CEO Brian Moynihan put a similar figure forward, reportedly suggesting as much as $6 trillion in deposits, representing roughly 30-35% of all U.S. commercial bank deposits, could be at risk.

 

Stablecoins registered $33 trillion in transaction volume in 2025, up 72% year-over-year. Bernstein projects total stablecoin supply will reach approximately $420 billion by the end of 2026, with longer-run forecasts from Citi putting the market at up to $4 trillion by 2030. Those aren't niche numbers anymore. At that scale, deposit competition becomes a serious macroeconomic question.

 

The American Bankers Association and 52 state bankers' associations explicitly urged Congress to extend the GENIUS Act's yield prohibitions to partners and affiliates of stablecoin issuers, warning of deposit disintermediation.

 

The Bottom Line

What's playing out right now is a genuine philosophical disagreement about what money is and how it should be regulated, wrapped inside a very consequential legislative fight, a prize fight with Banks in one corner and Crypto in the other.

 

Dimon's argument is not frivolous. Banks are regulated as heavily as they are because of what they do with deposited money, and a world where consumers move trillions into yield-bearing crypto instruments held at lightly regulated platforms carries real risks. The history of financial crises is largely a history of regulatory arbitrage gone wrong.

 

But Witt's counter is also not frivolous. The GENIUS Act was designed specifically to prevent stablecoin issuers from doing the things that make banks dangerous. A fully reserved, non-lending stablecoin issuer is structurally different from a fractional reserve bank, and applying the same regulatory framework to both risks conflating two fundamentally different business models.

 

What's harder to square is that the banking lobby's intervention in the CLARITY Act seems, to many in the crypto world, less about prudential regulation and more about protecting market share. President Trump has not been subtle about that read, accusing banks of holding the CLARITY Act hostage to protect incumbent interests against crypto competition.

 

With the legislative window narrowing, Armstrong back at the White House, and Trump openly calling out the banking lobby by name, this standoff has reached the kind of inflection point where someone is going to have to blink. The question is whether either side is willing to do it before time runs out entirely.

 

 

 

There’s been a lot of language coming out of Washington lately about stablecoins.

 

Words like "prudence", "guardrails", and "financial stability" get thrown around whenever the CLARITY Act comes up. Coinbase recently pulled their support amid stablecoin issues in the same bill. But if you take a step back, it’s hard not to feel like something else is driving the intensity of the debate. Big banks don’t usually fight this hard over niche policy details unless there’s something material at stake.

 

Browsing the web, trying to find my next article for all of you, I came across a recent report from Standard Chartered’s digital assets research team, led by Geoff Kendrick, and it may just help to explain the fight a bit better. 

 

A Forecast Banks Can’t Ignore

Kendrick’s research doesn’t treat stablecoins as a crypto sideshow. It treats them as a potential alternative home for real money, the kind of money that currently sits in checking and savings accounts. He actually estimated that $500 billion will move from bank deposits to stablecoins by 2028. The idea isn’t that everyone suddenly abandons banks. It’s subtler than that. Even a gradual shift of deposits into stablecoins changes the math for banks in ways they really don’t like. Funding becomes  more expensive, liquidity assumptions get weaker, margins get squeezed. Those aren’t ideological concerns. Those are spreadsheet concerns. And spreadsheet concerns really make banks want to fight the issue.

 

But to understand the real threat to banks, you first have to better understand the business itself. Banks don’t just hold your money. They use it. Under fractional reserve banking, they keep only a slice and lend the rest out to earn interest for themselves. Sure, they'll keep that small portion of your deposit, but the majority gets reinvested through loans and other activities. That’s how they earn money and why they can afford to even pay any interest to you at all, even if it’s usually minimal.

 

This system works because deposits are assumed to be sticky. People don’t move their money often, and when they do, it usually stays within the banking system. Moving from one bank to another.

 

Stablecoins challenge that assumption. They make dollars mobile in a way they haven’t been before.

 

The Shift Is Coming

Right now, most stablecoins feel like tools, not destinations. They’re useful for transfers, trading, and crypto-native activity, but they’re not where most people park idle cash. Yield changes that. The moment a stablecoin starts paying something meaningfully better than a traditional savings account, the comparison becomes unavoidable. A digital dollar that moves instantly, works around the clock, and earns yield starts to look less like a crypto product and more like a better bank balance. That’s when stablecoins stop being adjacent to banking and start competing with it.

 

But, we're still talking mostly about crypto-native people. The real shift happens when stablecoins stop feeling like crypto at all, when they live inside apps people already trust and use every day. When you easily pay for your groceries on your phone without writing down that seed phrase for crypto that sits on a separate wallet that may or may not be linked to payments.

 

PayPal is already experimenting here. Their Paypal USD (PYUSD) exists inside a platform with hundreds of millions of users, and it already lets people move dollars instantly between PayPal and Venmo for free. That’s everyday payment stuff. It’s not a niche oracles or decentralized exchange use case. It’s peer to peer transfers in apps people use for rent, splitting bills, or sending money to family.

 

Cash App has also signaled support for stablecoin payments and more flexible money movement options, even if Bitcoin hasn’t become everyday cash yet. The point is simple: If stablecoins actually become integrated into the way regular people pay for things, save for short-term goals, and move money around, they stop being a "crypto thing” and become an alternative store of value and payment rail to banks.

 

That’s exactly the scenario a bank CFO would find unsettling.

 

Why the CLARITY Act Matters So Much

This is why the fight over stablecoin yield inside the CLARITY Act feels so charged. It’s not really about whether stablecoins should exist. That battle is already over. It’s about whether they’re allowed to become a true alternative to bank deposits. If yield stays restricted, stablecoins grow slowly and remain mostly transactional. If yield is allowed under a clear regulatory framework, they start to compete directly with how banks fund themselves. That’s a much bigger shift.

 

The Bottom Line

If you take Kendrick’s projections seriously, and I know that I do. I have been in this blockchain industry for a decade now. I have seen the shift from Silk Road and from not even being a second thought in Washington to being a presidential election policy issue and talked about at the highest levels of government, from sea to shining sea.

 

But pushback from banks does make sense. It’s not panic. It’s defense. Stablecoins that are easy to use, deeply integrated into everyday payment apps, how people spend their money, and capable of earning yield... threaten something fundamental. They threaten the quiet bargain where banks get cheap access to capital and customers accept low returns in exchange for convenience. Seen through that lens, the resistance to stablecoin yield isn’t surprising at all. It’s exactly what you’d expect when a new form of money starts to look a little too good at doing the job banks have always relied on to make money.

 

I know where I stand on the issue and I'm interested to know what you think. Do banks evolve, embrace stablecoins as inevitability or do they hold on to the old ways for dear life?

 

Washington’s long-running effort to write clear rules for crypto is moving forward, but not cleanly.

 

The U.S. Senate has released updated language for a long-anticipated crypto market structure bill, yet deep disagreements remain between lawmakers, committees, and the industry itself. Two separate Senate committees are now pushing different versions of the legislation, and the gaps between them are proving harder to close than many expected.

 

At stake is nothing less than who regulates crypto in the United States, how stablecoins are allowed to operate, and whether decentralized finance can exist without being squeezed into a framework built for Wall Street.

 

A Bill That Is Really Two Bills

The market structure effort is split between the Senate Agriculture Committee and the Senate Banking Committee, each advancing its own vision of how digital assets should be governed.

 

The Agriculture Committee’s draft leans heavily toward expanding the authority of the Commodity Futures Trading Commission. Under this approach, most major cryptocurrencies would be treated as digital commodities, placing them largely outside the Securities and Exchange Commission’s reach.

 

The Banking Committee’s version, often referred to as the CLARITY Act, takes a more cautious and detailed approach. It attempts to draw clearer legal lines between what counts as a security and what does not, while preserving a significant role for the SEC in overseeing parts of the crypto market.

 

Both sides say they want regulatory certainty. The problem is they disagree on what that certainty should look like.

 

The CFTC Versus SEC Fight Is Still the Core Issue

At the heart of the debate is a familiar Washington turf war.

 

Supporters of the Agriculture Committee draft argue that the CFTC is better suited to oversee crypto markets, particularly spot trading for assets like Bitcoin and Ethereum. They point to the agency’s lighter touch, its experience with commodities, and its closer alignment with how crypto markets actually function.

 

The Banking Committee sees things differently. Its members are more focused on investor protection and worry that shifting too much power to the CFTC could weaken oversight. Their draft tries to preserve the SEC’s role, especially when tokens are issued in ways that resemble traditional securities offerings.

 

Neither side appears ready to fully back down, which is why the Senate still has not settled on a single unified bill.

 

Stablecoins Become a Flashpoint

Stablecoins, once seen as the least controversial corner of crypto, are now one of the most contentious parts of the bill.

 

One major sticking point is a proposed restriction on stablecoin rewards or yield. Under the Banking Committee’s draft, issuers would face limits on paying users simply for holding stablecoins.

 

Crypto companies argue this would kneecap a core feature of digital dollars and make them less competitive with traditional financial products. Some in the industry say the provision feels less like consumer protection and more like an attempt to shield banks from competition.

 

Lawmakers defending the restriction say they are trying to prevent stablecoins from morphing into unregulated interest-bearing products that could pose risks to consumers and the broader financial system.

 

The disagreement has become symbolic of a larger divide over how much freedom crypto should have to innovate inside a regulated framework.

 

DeFi Still Does Not Fit Neatly Anywhere

Decentralized finance remains one of the hardest issues for lawmakers to solve.

 

Both Senate drafts struggle with how to treat protocols that do not have a central company, executive team, or traditional governance structure. Some lawmakers want stronger rules to prevent DeFi platforms from being used for illicit activity. Others worry that applying centralized compliance models to decentralized systems will effectively ban them.

 

For now, DeFi remains an unresolved problem in the bill, with language that critics say is either too vague or too aggressive, depending on who you ask.

 

Coinbase Draws a Line in the Sand

Industry frustration boiled over when Coinbase publicly withdrew its support for the Banking Committee’s draft.

 

The exchange called the proposal worse than the status quo, pointing to its treatment of DeFi, stablecoin yield restrictions, and limits on tokenized equities. Coinbase’s criticism carried weight in Washington and contributed to the Banking Committee delaying its planned markup hearing.

 

That delay rippled through the market, briefly weighing on crypto prices before sentiment stabilized.

 

Timing Gets Complicated

The Agriculture Committee is moving ahead more quickly, scheduling a markup hearing to debate amendments and advance its version of the bill.

 

The Banking Committee, meanwhile, has pushed its timeline back as lawmakers juggle other priorities, including housing legislation. That has pushed any meaningful progress into late winter or early spring at the earliest.

 

The longer the process drags on, the more uncertain the path becomes. Election season is approaching, and legislative calendars tend to tighten as political pressure increases.

 

A Broader Regulatory Backdrop Is Already in Place

The market structure debate is happening against a backdrop of recent regulatory action.

 

Congress has already passed stablecoin legislation that sets rules around reserves, disclosures, and audits. Earlier House efforts, including last year’s market structure bill, also laid groundwork by outlining how digital assets might be classified under federal law.

 

What the Senate is trying to do now is connect those pieces into a comprehensive framework. That has proven easier said than done.

 

The Next Test

The next major test will be whether the Agriculture and Banking Committees can reconcile their differences or whether one version gains enough momentum to dominate the process.

 

Expect heavy lobbying from crypto companies, financial institutions, and trade groups, particularly around stablecoin yield, DeFi protections, and agency jurisdiction.

 

For now, the Senate’s crypto market structure bill remains a work in progress, ambitious in scope, politically fragile, and still very much unsettled.

 

One thing is clear. The era of regulatory ambiguity is ending, even if the final shape of crypto regulation in the U.S. is still being fought over line by line.

Coinbase Draws a Line in the Sand on Market Structure Bill

 

Coinbase is stepping back from Washington’s biggest crypto push yet.

Just days before a crucial vote in the Senate Banking Committee, the largest US crypto exchange says it will not support the Senate’s sweeping crypto market structure bill in its current form. The message from Coinbase CEO, Brian Armstrong, is blunt. Regulatory clarity matters, but not at any cost.

The move highlights a growing divide between lawmakers eager to lock in federal rules and an industry increasingly wary of legislation that could reshape its business in unintended ways.

 

A Bill Meant to End the Gray Area

The Senate bill, months in the making, is designed to finally spell out how digital assets are regulated in the United States. At its core, the proposal tries to answer long-standing questions about which crypto assets fall under securities law, which should be treated as commodities, and how oversight should be split between regulators.

For years, crypto companies have complained that the lack of clear rules has pushed innovation offshore and left firms vulnerable to enforcement actions after the fact. On paper, this bill is supposed to fix that.

But as the text has taken shape, it has also picked up provisions that some in the industry see as deal-breakers.

 

Stablecoin Rewards Become the Flashpoint

For Coinbase, the biggest problem sits with stablecoins.

The draft legislation includes language that could sharply limit or effectively eliminate rewards paid to users who hold stablecoins on platforms like Coinbase. These rewards are not technically interest paid by issuers, but incentives offered by exchanges and intermediaries. Still, critics argue they look and feel a lot like bank deposits, without bank-style regulation.

Traditional banking groups have pushed hard for tighter rules here. Their concern is straightforward. If consumers can earn yield on dollar-pegged crypto tokens outside the banking system, deposits could drain from insured banks, particularly smaller ones.

Coinbase sees it differently. Stablecoin rewards have become a meaningful part of how crypto platforms compete and how users engage with dollar-based crypto products. Cutting them off, the company argues, would harm consumers and hand an advantage back to traditional finance.

In private and public conversations, Coinbase executives have made it clear that they are unwilling to back a bill that undercuts what they view as a legitimate and already regulated product.

"After reviewing the Senate Banking draft text over the last 48 hours, Coinbase unfortunately can’t support the bill as written,” Armstrong said. "This version would be materially worse than the current status quo, we'd rather have no bill than a bad bill."

 

Why This Matters Beyond Coinbase

Coinbase’s stance carries weight. It is one of the most politically active crypto companies in Washington and often serves as a bellwether for broader industry sentiment.

If Coinbase is out, others may quietly follow.

That raises the risk that lawmakers end up with a bill that lacks meaningful industry buy-in, or worse, one that passes but leaves key players unhappy enough to challenge or work around it.

Some firms are already exploring alternatives, including banking charters or trust licenses, as a hedge against restrictive federal rules. Others may simply slow US expansion and look overseas.

 

A Narrow Path Forward in the Senate

The timing is not ideal.

The Senate Banking Committee is expected to vote on the bill imminently, but support remains fragile. Lawmakers are divided not just on stablecoins, but also on how to handle decentralized finance, custody rules, and even ethics provisions tied to political exposure to crypto.

Add in election-year politics, and the window for compromise looks tight.

If the bill stalls or fails in committee, there is a real chance it gets pushed into the next Congress. That would mean at least another year, and likely more, of regulatory uncertainty.

 

No Law vs a Bad Law

Behind the scenes, a familiar argument is playing out.

Some in Washington believe that imperfect legislation is better than none at all. The industry, scarred by years of enforcement-first regulation, is no longer convinced.

Coinbase’s decision reflects a growing view among crypto companies that a flawed law could do more long-term damage than continued ambiguity. Once rules are written into statute, they are far harder to undo.

For now, the standoff continues.

 

Whether lawmakers soften the bill to keep major players on board or push ahead regardless may determine not just the fate of this legislation, but the shape of US crypto regulation for years to come.

 

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