U.S. Policy Is Clearer For Stablecoins Than For Broader Crypto Market Structure
Key takeaways
- Information flow about the Clarity Act is described as inconsistent, with multiple conflicting accounts circulating within the same week.
- Walmart is described as using third-party providers for financial features (including Zero Hash for crypto under OnePay) while aiming to deepen direct monetization and reduce reliance on intermediaries.
- Large hype-driven token launches with pre-deposit vaults and pre-baked TVL are described as tending to produce weak token performance and higher initial volatility.
- The U.S. banking lobby is concerned that the GENIUS Act includes a rewards carve-out that they interpret as enabling stablecoin yield payments.
- Dragonfly reports that the fastest-growing areas in its portfolio are stablecoins and prediction markets, and it highlights Polymarket as a notable prediction market investment.
Sections
U.S. Policy Is Clearer For Stablecoins Than For Broader Crypto Market Structure
A key delta is the asymmetric legislative outcome: a stablecoin framework is described as enacted while broader market-structure rules remain unresolved, with near-term process risk and conflicting information around the Clarity Act. The implied mental-model update is to separate stablecoin product/regulatory timelines from exchange/DeFi/token-market timelines, and to treat market-structure clarity as a staged, procedurally fragile process rather than a single binary catalyst.
- Information flow about the Clarity Act is described as inconsistent, with multiple conflicting accounts circulating within the same week.
- A standoff is described in which some lawmakers insist GENIUS stablecoin provisions will not be changed in the Clarity markup while the banking lobby seeks changes tied to rewards/yield concerns.
- U.S. stablecoin legislation (the GENIUS Act) passed in 2025, while a broader crypto market-structure bill did not pass.
- The market-structure bill is described as having failed due to difficulty bringing Democrats on board and strong lobbying against it.
- The Senate Banking Committee is described as the next mover on the Clarity Act and is expected to produce a markup roughly next week before any committee vote to advance it.
- Prediction market odds discussed imply low near-term chances of a market-structure bill passing by early 2026, but a higher likelihood by 2026 (with odds given for passage before 2027).
Distribution Is Shifting Toward Mass-Market And Identity/Embedded-Finance Channels
Several deltas point to non-crypto-native distribution: a major retailer app adding crypto trading, a broad embedded-finance bundle in OnePay, and claims of leading wallet MAUs driven by product integrations (e.g., identity verification) plus emerging-market stablecoin wallet growth. The mental-model update is that consumer adoption may be more about UI abstraction and existing brand/platform trust than about crypto-native wallets, but several key metrics are secondhand and require validation.
- Walmart is described as using third-party providers for financial features (including Zero Hash for crypto under OnePay) while aiming to deepen direct monetization and reduce reliance on intermediaries.
- Walmart’s app is reported to have added crypto trading features allowing users to buy and sell crypto, but not to pay with Bitcoin at checkout, and may include crypto rewards.
- Walmart’s OnePay suite is described as including high-yield savings, credit cards, buy-now-pay-later, a mobile plan, peer-to-peer payments, and crypto trading.
- Trusted brands like Walmart and telecoms are described as able to drive adoption among underserved consumers if crypto complexity is abstracted behind a slick app experience.
- SensorTower data is cited as showing the World app as the number one wallet globally by monthly active users, exceeding Base, MetaMask, and Phantom.
- World’s rollout is described as including a Tinder integration requiring identity verification using World and including in-app currency conversion and payments.
Onchain Perps Competition Is Framed As Leader-With-Ahead-Start Plus A Credible Challenger
The corpus frames a market structure where an incumbent has a head start while a specific competitor is highlighted for infrastructure/team quality and post-token-launch activity holding up. It also calls out token-launch mechanics (points markets, pre-deposit hype) as potentially relevant to post-launch outcomes. The mental-model update is to treat exchange KPIs (volume/OI) and launch design as distinct levers, while recognizing these claims are largely not accompanied by primary KPI datasets here.
- Large hype-driven token launches with pre-deposit vaults and pre-baked TVL are described as tending to produce weak token performance and higher initial volatility.
- Long-term token success is framed as following from building a product people want to use rather than optimizing launch timing or hype.
- There was an active points market for Lighter in which participants bought points to speculate on the eventual token generation event price.
- Lighter’s volume and open interest are reported to have held up well after its token generation event.
- Lighter is described as the strongest competitor to Hyperliquid seen so far based on infrastructure quality and team strength.
- Dragonfly is described as one of the most active PerpDEX investors, and it says Lighter has been performing very well among its PerpDEX investments.
Stablecoin Rewards/Yield Is A Contested Implementation Surface With Active Lobbying
The corpus highlights a specific policy contention: whether stablecoin “rewards” effectively create yield and whether GENIUS will be amended or narrowed via a market-structure bill markup. The implied mental-model update is that “stablecoin legality” does not fully determine permissible consumer incentives; distribution economics may hinge on how rewards are interpreted or constrained.
- The U.S. banking lobby is concerned that the GENIUS Act includes a rewards carve-out that they interpret as enabling stablecoin yield payments.
- A standoff is described in which some lawmakers insist GENIUS stablecoin provisions will not be changed in the Clarity markup while the banking lobby seeks changes tied to rewards/yield concerns.
- The American Banking Association is described as lobbying to remove or limit the GENIUS Act’s perceived rewards/yield carve-out via changes pursued during the Clarity Act markup process.
- Banks are described as pushing to have yield-like stablecoin products treated under money market fund rules rather than under a GENIUS rewards carve-out.
- An ABA communication is summarized as arguing stablecoin rewards risk community-bank deposit bases and citing a figure of $6T of deposits potentially impacted.
Capital Allocation Is Shifting Later-Stage; Category Traction Signals Emphasize Stablecoins And Prediction Markets
The corpus suggests a stage shift toward later rounds (Series C) and claims of portfolio traction concentrated in stablecoins and prediction markets, with a more constructive DeFi funding stance than typical. The mental-model update is to expect more “company-level” dispersion and financing heat at later stages, while early-stage pace may not accelerate, but details are mostly expectation and anecdotal deal knowledge.
- Dragonfly reports that the fastest-growing areas in its portfolio are stablecoins and prediction markets, and it highlights Polymarket as a notable prediction market investment.
- Dragonfly is described as expecting to slow deployment in 2026 due to increased interest in growth equity and later-stage rounds while early-stage activity may go sideways.
- Dragonfly is described as more constructive than most on DeFi funding right now and reports its DeFi investments continue to do well.
- Late-stage crypto funding is described as picking up relative to early stage, with two large Series C rounds expected to be announced this month involving fast-growing companies.
Watchlist
- Information flow about the Clarity Act is described as inconsistent, with multiple conflicting accounts circulating within the same week.
- Fed Governor Waller is described as having requested comment on “skinny master accounts” that could enable tech and stablecoin companies to interact with Fed payment rails.
Unknowns
- What is the actual scope and operative interpretation of the GENIUS Act “rewards” carve-out, and will any Clarity Act markup text attempt to modify it?
- What primary-source legislative artifacts (draft text, committee schedule, official statements) resolve the current conflicting accounts about the Clarity Act’s direction and timing?
- Do stablecoin payment volumes and merchant acceptance in the U.S. show leading indicators consistent with a 2026 shift into everyday domestic payments?
- Will “skinny master accounts” progress from request-for-comment to actionable guidance, pilots, or approvals, and what eligibility constraints would apply?
- What are the verified MAU and activity metrics for World and how does SensorTower define “wallet” in the cited ranking?