Stablecoins Stumble: CLARITY Act's Passage Uncertain Amid Regulatory Hurdles

The CLARITY Act's chances of passing before Congress goes on summer break are slim. Even if it passes, stablecoins still face significant hurdles to gain mainstream acceptance.

Current stablecoin issuers like Tether and Circle may have a large market share, but their usage is largely limited to trading cryptocurrencies, with only about 1% of the $35 trillion in stablecoin transactions used for end-user payments. This represents just 0.02% of global payment volume.

The Federal Reserve's affirmation of the 'moneyness' of stablecoins would be a crucial step towards making them exchangeable and transferable with other forms of money, but this may not happen soon. Banks are using the current regulatory uncertainty to create their own digital currencies.