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Citi says the CLARITY Act is still the central catalyst for legitimizing digital assets in the U.S., though progress is being slowed by negotiations over its most contentious provisions. The bank noted that while the Senate Agriculture Committee has advanced its version of the bill, the Senate Banking Committee still controls the most difficult issues, leaving the overall timeline uncertain. Spring milestones are still possible, but the risk of delays is rising, with final passage potentially slipping beyond 2026. Analysts led by Peter Christiansen said passage of the CLARITY Act is essential to provide legal clarity around who regulates digital assets, how tokens are classified, and which activities fall under securities or commodities law. Clear rules, they argue, would reduce regulatory overlap and help bring crypto activity back to the U.S. Citi identified definitions around decentralized finance (DeFi) as the biggest hurdle. Lawmakers are debating when decentralized protocols, software, and developers should be treated as regulated service providers. An overly strict framework could weigh on Web3 development, decentralized exchanges, derivatives, stablecoin yield products, and layer-2 networks. Any compromise is likely to center on custody and oversight requirements rather than full software neutrality. By contrast, Citi sees more room for compromise on stablecoin rewards. Potential middle-ground solutions could include time-limited yields or alternative incentive structures, even as banks warn about regulatory arbitrage and crypto firms argue that rewards are key to user adoption. Citi said this debate does not change its longer-term positive view on stablecoin use in cross-border and business-to-business payments. $BTC $ETH $BNB #CZAMAonBinanceSquare #USPPIJump #USGovShutdown #USGovShutdown #WhoIsNextFedChair