Author: @BlazingKevin_, Researcher at Blockbooster

In spring 2026, the U.S. cryptocurrency regulatory framework is at a historic turning point. The legislative window for the CLARITY Act on Digital Asset Market Clarity is entering its final countdown, the GENIUS Act’s compliance requirements are fundamentally reshaping the stablecoin market structure, and the financial disclosure of Kevin Warsh, a Federal Reserve chair candidate, revealing a crypto portfolio exceeding $100 million, signals an unprecedented shift in the U.S. understanding of monetary policy and digital asset regulation. These three threads intertwine to form the most significant institutional variables for the crypto industry in 2026.

We systematically examine five core issues: ① the political economy of the CLARITY Act; ② the prudential regulatory logic and market impact of the GENIUS Act; ③ the nature, compromises, and trajectory of the stablecoin yield war; ④ the利益 structure of the four-party博弈; ⑤ the global ripple effects of passage or failure—aiming to provide researchers, practitioners, and policy observers with a comprehensive analytical framework.

Three Key Conclusions

① The legislative window cannot be missed: If the CLARITY Act fails to receive markup from the Senate Banking Committee by the end of April, its chances of passage in 2026 will plummet to extremely low levels, potentially leading to a four-year delay during which the global landscape of cryptocurrency regulation will solidify without U.S. participation.

② Compliance becomes a core competitive advantage: The mandatory AML/CFT requirements of the GENIUS Act will inevitably drive the stablecoin market toward leading compliant firms, with USDC and Tether’s new USAT set to be the biggest beneficiaries, while USDT’s market share among U.S. institutional players will face structural contraction.

③ Generational Shift in Regulatory Understanding: If officials with deep cryptocurrency investment backgrounds, such as Kevin Warsh, take the lead at the Federal Reserve, they will create the most crypto-friendly macroeconomic policy environment to date—not merely through regulatory easing, but through strategic integration of crypto assets into mainstream financial infrastructure.

1 Background: From Regulatory Vacuum to Legislative Conclusion

Over the past decade, U.S. cryptocurrency regulation has been mired in deep structural challenges: the SEC has forcibly applied its securities framework using the Howey test, while the CFTC asserts commodity classification, resulting in blurred regulatory boundaries that leave firms unable to determine compliance—until they are sued. This “regulation by enforcement” model has accumulated numerous unresolved legal cases, causing conservative institutions such as pension funds and insurance companies to remain on the sidelines.

In July 2025, Congress passed the GENIUS Act, establishing for the first time a federal prudential regulatory framework for payment stablecoins—requiring 100% reserves, mandatory AML compliance, and oversight by the OCC. That same month, the CLARITY Act passed the House by a bipartisan vote of 294 to 134, aiming to create a market structure framework covering the entire digital asset ecosystem. On March 17, 2026, the SEC and CFTC jointly ruled that major assets such as Bitcoin and Ethereum are officially classified as “digital commodities,” resolving the longest-standing jurisdictional dispute. The CLARITY Act serves as the culminating piece of this legislative series.

The 2026 midterm elections represent the most hard deadline in politics: if control of the House shifts in the election, the pro-crypto Republican legislative coalition will dissolve, eliminating the political foundation for the CLARITY Act. Senator Lummis issued the most direct warning on April 11: “Pass it now, or wait until 2030.” Senator Moreno further clarified that if the bill does not reach the full Senate by May, digital asset legislation may not be seriously considered for years.

JPMorgan's latest analysis

Negotiations have entered the final stretch, with the number of disputed issues reduced from over a dozen to just two or three.

JPMorgan predicts: If the bill is passed by mid-2026, institutional entry into digital assets will experience a significant acceleration in the second half of the year, with pension and insurance funds gaining a clear compliance pathway.

2 GENIUS Act: Prudential Regulatory Logic and Market Reshaping

The two bills differ fundamentally in their regulatory approaches. The CLARITY Act focuses on market structure, addressing asset classification and the regulation of trading platforms, while the GENIUS Act emphasizes prudential regulation, bringing payment stablecoins under a regulatory framework similar to that of banks.

The core of the GENIUS Act is to explicitly classify stablecoin issuers as "financial institutions" under the Bank Secrecy Act, requiring them to establish effective AML/CFT programs, mandatory sanctions compliance programs, maintain 1:1 reserve backing, and submit to strict oversight by federal agencies such as the OCC. The new regulations proposed by FinCEN and OFAC require the implementation of sophisticated technical control systems to freeze or block non-compliant transactions and conduct independent compliance testing.

These fixed compliance costs—professional AML compliance officers, enterprise-grade monitoring systems, and independent audits—create significant barriers to entry for small issuers, inevitably driving market consolidation toward leading compliant firms. Forbes analysis notes: “Compliance costs will lead to market consolidation.”

Tether's USAT Strategy: Dual-Brand Parallel Operations

USAT, issued by Anchorage Digital Bank and custodied by Cantor Fitzgerald, fully complies with the stringent standards of the GENIUS Act. Tether is entering the U.S. institutional market through this highly compliant sub-brand, while maintaining USDT’s global dominance—a carefully orchestrated “dual-brand strategy”: using USDT to secure liquidity from global retail users and emerging markets, and USAT to capture U.S. institutional capital.

3 Stablecoin Yield Wars

The economic core of the stablecoin yield controversy is disintermediation: if holding stablecoins generates passive returns close to short-term U.S. Treasury yields (historically 3.5%–5%), while bank savings accounts offer near-zero interest, a powerful incentive arises to move funds. In February 2026, JPMorgan Chase CEO Brian Moynihan warned that allowing stablecoins to offer passive yields could trigger "trillions of dollars in deposit outflows," threatening community banks’ ability to extend credit.

However, the White House Council of Economic Advisers (CEA) released a report on April 8, 2026, directly challenging the banking industry’s argument: a complete ban on stablecoin yields would increase bank lending by only about $2.1 billion (just 0.02%), while simultaneously causing consumers a net welfare loss of $800 million. Even under the most extreme assumptions, the boost to community bank lending would be extremely limited. This internal government data report provides the crypto industry with its most powerful policy advocacy tool.

On March 20, 2026, Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks reached a principled compromise with the following core framework:

• Specific criteria for stablecoin activity rewards: There are no clear precedents, either technically or legally, on how to distinguish between "activity-related" and "passive" actions at the enforcement level.
• The Fed’s veto power over state-chartered issuers: Directly determines whether institutions like USDC can access the federal payment system.
• DeFi AML compliance requirements: Some Democratic senators express concern that non-custodial protocols could become AML loopholes.
• Government official conflict of interest clause: A mandatory precondition for bipartisan cooperation by Democrats, directly conflicting with the Trump family’s cryptocurrency business interests.

Four-party game structure

The Trump administration has positioned the CLARITY Act as the cornerstone legislation in its strategy to make the United States the global capital of cryptocurrency, with clear political intent. Patrick Witt, Executive Director of the White House Presidential Advisory Committee on Digital Assets, personally led negotiations and mediation; Deputy Treasury Secretary Scott Bessent publicly called for rapid progress by spring 2026; and the White House CEA report proactively provided data to support deregulation of stablecoin yields.

But the White House faces a dilemma: accepting the Democratic president’s crypto holding ban would amount to acknowledging potential compliance risks with the Trump family’s business interests; refusing would fail to overcome the 60-vote threshold, making it impossible to advance the bill regardless.

Global impact of approval or rejection

MiCA (the EU’s Markets in Crypto-Assets Regulation) fully came into effect in early 2025, with approximately 102 institutions granted MiCA authorization, making it the most comprehensive crypto regulatory framework globally. If the CLARITY Act is passed, pressure will increase to align U.S. and EU regulatory frameworks, potentially triggering bilateral regulatory recognition negotiations, and leading to direct competition between U.S. dollar stablecoins and the Euro Stablecoin Alliance (ING/UniCredit/BNP Paribas, expected to launch in the second half of 2026). If the Act is shelved, the European MiCA standard will continue to be exported globally without competitive pressure from the U.S.

A global regulatory triad is emerging: the United States (following the passage of the CLARITY Act), the European Union (MiCA), and a competing trio of offshore hubs—Hong Kong, Singapore, and Dubai. Pakistan officially lifted its eight-year ban on crypto banking on April 14, 2026; meanwhile, the UK FCA released a consultation paper on its crypto regulatory framework, with the authorization window set to open on September 30. If the U.S. stands aside, Asia-Pacific’s regulatory gray zones will continue to draw businesses and talent away.

Galaxy Research estimates: If the bill fails to complete committee review by April, its probability of passage in 2026 drops to an extremely low level. TradingKey analysis notes: “Passage of the bill will unlock trillions of dollars in institutional capital”—conservative institutional investors such as pension funds and insurance companies will gain a clear, compliant pathway to enter the market. In 2025, Bitcoin ETFs have already accumulated over $115 billion in assets, a precursor signal of even larger institutional allocations likely to follow the passage of the CLARITY Act.

Conclusion: The New Crypto Order After Regulatory Finalization

2026 will be a historic turning point in U.S. cryptocurrency regulation. Three key threads—the final legislative passage of the CLARITY Act, the GENIUS Act’s restructuring of the stablecoin market, and Representative Warsh’s generational shift in regulatory understanding—point in the same direction: cryptocurrency is being pulled from regulatory gray areas into the institutional core of mainstream finance.

The scarcity of the legislative window means this博弈 has no second chance. Each participant in this four-way博弈—crypto companies, the banking sector, regulators, and the Democratic camp—is seeking to maximize its own interests within this time-limited process, and the final compromise text will inevitably be a gray area that no party fully approves of but all can accept.

For market participants, there is only one core strategic insight: regardless of how the legislation ultimately passes, compliance capability will become the most important competitive moat over the next five years. In a new crypto market dominated by institutional capital, only those who have proactively built out their compliance infrastructure amid regulatory uncertainty will be able to navigate through regulatory cycles.

About BlockBooster:

BlockBooster is a next-generation alternative asset management firm built for the digital age. We leverage blockchain technology to invest in, incubate, and manage core assets of the digital era—from blockchain-native projects to real-world assets (RWA). As co-creators of value, we are committed to uncovering and unlocking the long-term potential of assets, helping our partners and investors capture exceptional value in the tide of the digital economy.

Disclaimer: This article/blog is for informational purposes only and represents the author’s personal opinions, not the views of BlockBooster.

This article is not intended to provide:

(i) Investment advice or investment recommendations; (ii) Offers or solicitations to buy, sell, or hold digital assets; or (iii) Financial, accounting, legal, or tax advice. Holding digital assets, including stablecoins and NFTs, carries extremely high risk, with significant price volatility and the potential to become worthless. You should carefully consider whether trading or holding digital assets is suitable for you based on your individual financial situation. For specific questions, consult your legal, tax, or investment advisor. The information provided in this document (including market data and statistics, if any) is for general reference only. Reasonable care has been taken in preparing this data and charts, but no responsibility is accepted for any factual errors or omissions contained herein.