š The "Missing Link": Why the CLARITY Act is the Key to U.S. Stablecoin Success
āRepresentative French Hill is sounding the alarm: the recently passed GENIUS Act is a major win, but itās only half the battle. To truly unlock the potential of stablecoins, Hill argues that the CLARITY Act must followāand soon.
āšļø The Legislative Breakdown
āThe GENIUS Act (Law): Regulates the issuers of stablecoins, ensuring they are backed 1:1 by high-quality liquid assets. Itās the rulebook for who can "print" the coins.
āThe CLARITY Act (Pending): Regulates the market. It defines which agency (SEC vs. CFTC) oversees specific assets and sets the rules for exchanges where these stablecoins are traded.
āā ļø Why It Matters Now
āHillās "foundations first" approach highlights a
critical gap: we have rules for making stablecoins, but we still lack a clear federal framework for trading them.
āJurisdictional Peace: Without the CLARITY Act, the SEC could still classify certain stablecoin activities as securities transactions, creating a "regulation by enforcement" trap.
āThe Yield Dispute: A major 2026 flashpoint is the stablecoin rewards ban. Traditional banks are pushing to stop crypto platforms from offering interest on stablecoinsāa move Coinbase CEO Brian Armstrong has called a "red line."
āInstitutional Gridlock: Large banks are ready to dive in under the GENIUS Act, but many remain on the sidelines until the CLARITY Act provides "clear rules of the road" for custody and bankruptcy.
āš Current Status
āThe bill is currently stalled in the Senate. A critical hearing scheduled for mid-January 2026 was postponed, pushing the timeline to March. With the 2026 midterms looming, Hill is urging his colleagues to act before the political window closes.
