10th April 2026 > > The CLARITY Act.

tl;dr

An update on the CLARITY Act that does not reflect well on TradFi, reinforcing our need for the crypto revolution.

Market Snap

Market Wrap

Spot BTC ETF flows are showing tentative signs of recovery whilst perpetual futures funding rates head towards negative territory again, despite the liquidations of shorts over the last couple of days. We are all beholden to Trump’s mood swings in the continuing absence of any meaningful progress towards resolution in the Middle East.

Curious Cryptos’ Commentary – The CLARITY Act

We are seemingly no nearer bi-partisan agreement on the major sticking point holding up passage of the CLARITY Act, namely whether stablecoin issuers can pay yield-like returns to holders. TradFi banks have claimed that allowing this to happen would result in $6 TRILLION moving out of banks and into stablecoins, weakening lending by TradFi, and reducing banks’ position in the financial markets.

In the context of around $19 TRILLION of retail deposits that estimate comes in at around 30%. It seems to me that is an argument in favour of allowing stablecoin issuers to pay yield. TradFi banks get away with paying less than 1% overall to many deposit account holders whilst also providing slow settlement. The competition from stablecoin issuers paying anything up to 5% will force TradFi to improve their product offerings in both price and service. What’s not to like, unless you happen to be a banking executive getting paid fat bonuses funded by ripping off retail clients?

Scott Bessent, US Treasury Secretary, has issued a call to arms with a piece he wrote for the Wall Street Journal. Scott claims – with some credibility – that further delays will threaten the US’s planned dominance of the crypto industry, clearing the path for rogue states such as China, led by dictator Xi and his murderous henchmen, to build a dominant position. China is of course the leader in the issuance of that instrument of coercion and control, a CBDC. China cannot be allowed to gain hegemony in public blockchain technology as well as private blockchain technology.

Over to Scott:

“To preserve it (US leadership in financial innovation) and rise to the challenge before us, Congress must pass the Clarity Act. Senate floor time is scarce, and now is the time to act.”

If only they were listening, Scott, if only.

…

A report by White House economists takes a different line from the outlandish claims made by TradFi:

https://www.whitehouse.gov/research/2026/04/effects-of-stablecoin-yield-prohibition-on-bank-lending/

Remarkably short for an economics paper at only twenty-one pages long, it is still mostly irrelevant for our purposes except for the headline conclusion which is that banning stablecoin yields will result in increasing bank lending by just $2.1bn, a measly 0.02% of total loans. The welfare costs of doing so outweigh the benefits:

“It takes similarly implausible assumptions for the welfare effect of yield prohibition to turn positive.”

…

So, there you have it.

Either stablecoin yields will force TradFi to up its game, and should therefore be allowed, or its impact is minimal, and should therefore be allowed.

Unfortunately, the lobbying dollars spent by TradFi attempting to keep its moat that allows the industry to fleece retail clients clouds the judgement of too many Senators.