The narrative shift in stablecoin regulation to "repeated staking": CLARITY gains strength, ETH and payment assets may become winners

The Controversy: From “Yield” to “Rehypothecation”

Key Information

• White House crypto affairs head Patrick Witt pointed out: Lobbying around stablecoin “yields” misses the real risk, which is “rehypothecation of reserves.” The GENIUS Act explicitly bans this practice.
• This shift in narrative moves the discussion from “Should stablecoins exist” to “How to manage specific risks.”
• Trump publicly stated on Truth Social; on-chain data shows weekly stablecoin payments via WalletConnect reach $5.82 billion.
• Even with the Crypto Fear & Greed Index at only 10, ETH ETF fund flows remain positive, indicating funds are already positioning for “compliant yield assets.”

Policy and Timeline

• Trump’s time pressure + market game: He accuses banks of delaying CLARITY to “hijack” GENIUS; combined with Geoff Kendrick’s estimate of $500 billion in deposit outflows, making a compromise by mid-2026 more likely.
• Historical comparison: Similar delays often precede a phased increase in stablecoin TVL.

Industry Disagreements and Trade-offs

• Hoskinson criticizes CLARITY for potentially constraining innovation under the SEC; Garlinghouse emphasizes the need for “clarity rather than chaos.”
• Excessive pursuit of perfection may boost offshore motives, but obtaining “enforceable clarity” domestically in the US is more attractive to institutional capital.

Payments Are the Main Focus

• Stripe accepts stablecoin payments; Morph CEO notes that in emerging markets, stablecoins are genuinely used for inflation hedging.
• AI companion concepts lack regulatory support, with more noise than added value.

Overestimation of Bank Risk Narratives

• Banks conflate “yield” with “lending.” OCC’s proposal does not outright ban third-party yields but requires contract and compliance review, which aligns with the GENIUS framework.
• The so-called “deposit migration” lacks on-chain evidence; historically, stablecoins have mainly supplemented bank settlement functions, not replaced them.
• If CLARITY continues to be delayed:
  • Growth of regional stablecoins (e.g., FUSD on Avalanche) accelerates;
  • RWA tokenization surpasses $2 billion via Progmat;
  • Geopolitical risks (US-Iran tensions) suppress stocks, but BTC still rises 0.7% to $68,700;
  • On the trading side, payment-oriented issuers (like Circle) are favored, with marginal yields driven by payment volume rather than “yield wars.”

Market Participants and Pricing Paths

Core Judgments and Path Dependence

• The true systemic risk lies in “rehypothecation,” not whether yields exist.
• If CLARITY passes, stablecoin market cap could reach $1 trillion by 2027.
• Misjudging the boundary of “rehypothecation/yield” risks missing a shift in capital pricing.
• Crypto payment infrastructure is capturing share from traditional banking payments, with regulators catching up.

Operational Tips

• Focus on payment volume and on-chain settlement growth, not just “yield” rhetoric;
• If regulation delays, prioritize tracking regional stablecoins and RWA onboarding speed;
• Favor payment-oriented issuers and high-throughput infrastructure, maintaining a medium-term bullish stance on ETH.

Verdict: This narrative remains in the “mid-early” stage. The most advantage goes to builders and medium-to-long-term funds (issuers, infrastructure, institutional capital), followed by trend-following trading funds. Passive investors waiting for clarity may only chase prices later.