The US Senate Banking Committee’s vote on Thursday (May 14) to advance the Clarity Act marked one of the most significant regulatory developments for digital assets since the FTX collapse, reigniting demands for federal oversight.
The legislation, while still facing political and procedural hurdles, signals a growing bipartisan recognition that what was once viewed as a marginal or antagonistic sector is now increasingly treated as a strategic financial and technology industry.
The market response demonstrates the extent of central regulatory clarity for cryptocurrency valuations. Coinbase Stocks rose after the Senate Banking Committee introduced the bill, while broader cryptocurrency-related stocks also rose as investors priced in the possibility that stablecoins and digital assets will soon operate within a more predictable US regulatory framework.
This transformation is crucial for both established companies and startups. Historically, regulatory ambiguity has benefited offshore issuers wishing to operate aggressively outside U.S. jurisdiction. In contrast, clearer rules tend to favor companies with compatible balance sheets, banking relationships, and corporate ambitions. In practical terms, this means that regulation can accelerate consolidation around a smaller group of large-scale issuers and infrastructure providers.
This reality may ultimately determine the next phase of fintech competition. Companies that control stablecoin payment paths, treasury flows, and settlement infrastructure could become major players in global commerce in the same way that card networks and correspondent banks dominated the previous generation of payments.
However, cryptocurrencies and digital assets represent a barely visible segment of the global financial services landscape, and the challenge facing them remains enormous.
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Read more: The CLARITY Act advances as the debate over cryptocurrency oversight continues
Coding competition
The narrative of the cryptocurrency industry is no longer centered on token trading. It is now centered around controlling the transaction infrastructure. Cross-border settlement, trade payments, treasury operations, and blended finance are emerging as the main battlegrounds because these are the areas where stablecoins promise to offer economic advantages over legacy systems.
On Monday (May 11), for example, the corporate payments company Corpay launched a cooperation With a stablecoin infrastructure platform BVNK It aims to provide Corpay customers with stablecoin wallets and settlement capabilities.
This is also why the struggle over stablecoin returns has become politically sensitive. Banks are realizing that if stablecoin issuers start operating like deposit-taking institutions, parts of the traditional banking economy could move to blockchain-based rails. The emerging compromise in Washington of allowing usage-based rewards while restricting negative interest payments reflects an attempt to prevent stablecoins from directly replacing bank deposits while still enabling innovation.
Traditional banking groups continue to intensify pressure on regulators as they realize the competitive implications and the window for change is closing.
“The banking industry continues to believe that the Clarity Act should be further strengthened by tightening the ban on interest-like rewards for holding stablecoins while also allowing certain stablecoin payment transactions and activities to generate rewards. Without the necessary guardrails, stablecoin offerings are expected to drag down bank deposits and threaten domestic lending and economic activity across the country. In this spirit, we will continue to work with senators in good faith to address this issue and improve the bill and its chances on the Senate floor.” A coalition of banking industry groups said in a statement shared with PYMNTS.
The broader geopolitical angle is also important. The United States no longer discusses cryptocurrency regulation in isolation. Jurisdictions including the European Union, Singapore, Hong Kong and the UAE are aggressively building digital asset frameworks to attract capital and innovation. the Bank of England He announced Thursday that it was him Plan to relax Its restrictions on stablecoins after opposition from cryptocurrency companies.
See also: The shadow market for foreign stable currencies has become an issuance for corporate treasuries
The digital asset infrastructure battle
The venture capital and cryptocurrency finance environment in general also reflects growing confidence that regulation is moving toward normalization rather than prohibition. VCs are unlikely to aggressively fund stablecoin banking infrastructure if they believe the underlying business model faces existential regulatory risks.
Newbank Fassett Thursday It raised $51 million To expand its stablecoin-focused banking platform to emerging markets. PYMNTS wrote last month about the rise Popularity of stablecoins In emerging markets, the issues that result when they move into the mainstream. Elsewhere, a blockchain analytics company elliptical Tuesday (May 12) It raised $120 million In new funding to advance its mission of providing analytics to major banks, fintech companies, government agencies, and crypto and payment companies.
PYMNTS also spoke last year with Look at SheetritElliptic’s then-vice president of global policy and regulation, about the change Cryptocurrency scene in the United States “Until a few months ago, we almost saw reconnaissance missions for crypto companies looking at other jurisdictions,” Chetrit said.
“She was Leaving the United StatesAnd they were looking at Europe, they were looking at Asia, they were looking at the Caribbean. “They were looking at all these different jurisdictions to find regulatory clarity, to find regulatory understanding,” Chetrit added.
But even as institutional infrastructure expands, the industry continues to search for the elusive mainstream breakthrough: merchant payments. Trading volumes increased, Major financial institutions It has moved into the market, and many jurisdictions have clarified their regulations. However, stablecoins have yet to provide the type of seamless experience that consumers associate with modern payments.
PYMNTS recently spoke with the CEO of WalletConnect Jess Holgravewho said that although tokens have the infrastructure they need to scale, they still do not deliver Payment experience Users can trust.
“We’ve gotten to this point, mostly over the last 18 months, where the technology is ready,” Holgrave said in an interview published on Wednesday (May 13). “Liquidity is deep. I can move in and out of different assets between fiat and stablecoins with ease. The enablers are there.”
“About 76% of users have abandoned Crypto payment “In the last six months,” Holgrave said, pointing to new research. “They’ve been trying to pay with cryptocurrencies and they haven’t been able to.”
