Congressional stalemate over stablecoin rewards caps U.S. crypto valuations

A regulatory risk premium now caps valuation growth in U.S. crypto markets. This premium is the result of the absence of the Clarity Act, which has stalled in Congress. Lawmakers are currently in a stalemate over whether cryptocurrency firms can offer rewards to users for holding stablecoins. Banks argue that such rewards mimic bank deposits and could undermine traditional lending, while crypto firms maintain that these rewards incentivize adoption of dollar-backed digital infrastructure.

While the White House brokered a compromise in March through Senators Angela Alsobrooks and Thom Tillis that allows rewards tied to activity but prohibits rewards for holding, the Senate banking committee has not yet scheduled a markup to advance the bill. This regulatory uncertainty pushes capital toward Bitcoin and infrastructure, leaving exchanges and application layer innovation constrained.