Welcome to our institutional newsletter, Crypto Long & Short. This week:
- Alex Tapscott on the shutdown of the CLARITY Act and how it affects the average American consumer.
- Aisha Hunt writes that crypto will grow by upgrading Wall Street’s trusted products rather than replacing them.
- Top headlines institutions should be aware of by Helene Braun
- “RWA Perp Volume by Category: Equities Overtake Commodities” in Chart of the Week
-Alexandra Levis
Expert insight
What about the American consumer?
By Alex Tapscott, CEO, CMCC Global Capital Markets
The little guy is getting lost in the political horse-trading surrounding the CLARITY Act.
The US Senate Banking Committee recently advanced the Digital Asset Market CLARITY Act, legislation that, if passed, could finally establish clear rules for digital assets in the US. The bill has survived months of bipartisan negotiations and horse-trading between banking interests and upstart fintech companies.
A bipartisan compromise brokered by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) broke a log jam that had slowed the bill’s progress. In the end, the banks got most of what they wanted in this “deal”: The legislation explicitly prevents fintech platforms from treating stablecoins, digital assets backed by dollars, as interest-bearing accounts, while still allowing them to pay rewards and bonuses like banks and credit card issuers do.
That should have ended the debate. Still, banking lobby groups are calling for tighter restrictions to eliminate many forms of consumer rewards altogether. It is clear that they are looking to squash this already compromised bill before a full Senate vote so that it never reaches the Resolute Desk.
Lost in the political wrangling over crypto and banking interests is the average American consumer.
According to the Consumer Financial Protection Bureau (CFPB), Americans paid about $5.8 billion in overdraft fees by 2023, even after years of industry efforts to reduce so-called “junk fees.” Overdraft fees disproportionately affect financially vulnerable households, with nearly 80% of fees concentrated on 9% of accounts. And then there are account minimums, transfer fees and payment delays that add friction. Meanwhile, the average savings rate is just 0.38%.
Consumers want financial services to move faster, cost less and serve them more.
Stablecoins are gaining popularity because they herald a world where digital dollars move across the Internet as cheaply and seamlessly as a WhatsApp message. They can lower remittance costs, improve access to digital commerce, speed up real-time payments and create new ways for consumers to save, spend and shop online.
And Americans are asking for CLARITY because many already use these tools. According to the Crypto Council for Innovation, one in five American adults now owns cryptocurrency. That’s about 68.5 million people. Stablecoins are among the fastest growing categories of digital assets, especially among younger consumers, immigrants, freelancers and underserved communities seeking faster and cheaper financial tools. Four out of five merchants believe accepting crypto can help attract new customers, while 73% of small business owners expect crypto payments to grow.
This is what makes this debate so politically mystifying. For years, progressives argued that concentrated financial power hurt consumers and Main Street. They criticized big banks for extracting rents while lobbying against regulations that diluted banks’ influence. That criticism was often correct. Today, some of those progressives, like Elizabeth Warren, who championed the Consumer Financial Protection Bureau, are now defending bank profits against a technology that could inject real competition into financial services and empower consumers and small businesses.
Congress should pass CLARITY in its current form to benefit American consumers and preserve American competitiveness and leadership in the next era of financial technology. This lead is by no means assured: today, 88% of global crypto trading volume occurs on non-US exchanges, while foreign-issued stablecoins account for 75% of stablecoin volume. Over the past decade, the US share of global crypto developers has dropped from 38% to just 19%.
Do American politicians want their country to continue to lead, or do they prefer to watch such economic transformation from the sidelines?
In the 1990s, the Clinton administration helped usher in the commercial Internet through the Telecommunications Act of 1996, a bipartisan effort that expanded innovation and competition. Now Congress has an opportunity to release the new internet of value by passing CLARITY.
Under GENIUS and CLARITY, stablecoin issuers must meet strong reserve requirements, transparency obligations, anti-money laundering standards, cybersecurity regulations and consumer protections. Sensible public policy will unleash investment and innovation, as it did in the Internet age.
This story need not end in conflict between banks and blockchains. The incumbents can just as easily embrace blockchain and its various benefits, from real-time global settlement and tokenized assets to new forms of on-chain lending, payments, savings and commerce.
The question is whether lawmakers will vote to lead this next technological revolution and advance the interests of American consumers or cede the future to entrenched interests.
Principled perspectives
Why Crypto May Need ETFs More Than ETFs Need Crypto
By Aisha Hunt, Founder of Kelley Hunt, PLLC
Crypto spent its first decade replacing Wall Street. Its next trillion dollars may come from partnering with it. The first wave of tokenization focused on creating new assets, new venues and new systems outside of traditional finance. Some of that innovation mattered. Much of it struggled with the same problem: markets don’t scale on technology alone. They scale on trust, liquidity and distribution. That reality favors ETFs.
The ETF wrapper became one of the most successful financial products of the modern era because it solved practical investor problems at scale: low-cost access, transparency, intraday liquidity, operational simplicity and broad distribution across brokerage platforms and advisory channels.
These benefits took decades to build. Tokenization does not delete them. In fact, it can reinforce them. If blockchain rails can be integrated into ETFs, investors may not have to choose between innovation and protection. They could gain exposure to familiar products with the potential benefits of faster settlement, programmable ownership, collateral and broader digital interoperability, all within a structure already trusted by institutions, advisers and retail investors.
That’s a far bigger commercial opportunity than asking trillions of dollars to migrate into unknown vehicles. This is why an understated development matters. On January 21, 2026, F/m Investments LLC and The RBB Fund, Inc. filed what is believed to be the first exemption application by an ETF issuer seeking to tokenize shares of an exchange-traded fund, TBIL, the US Treasury 3 Month Bill ETF. The proposal will record ownership on an approved blockchain ledger, while maintaining the same fund, the same economy, the same listing and the same regulatory framework. The application remains pending with the SEC and there can be no assurance that relief will be granted. It may sound like a niche legal application. It isn’t. It is a test of whether the modernization of the capital markets takes place within or outside the regulatory area.
This distinction is important to investors because the next big growth category in the chain may not be speculative tokens. It can be trusted returns, usable security and regulated exposure. Stablecoins have already demonstrated the demand for digitally native dollars. The next logical step is digitally embedded instruments supported by real portfolios, real management and real investor protection.
This is where tokenized ETFs can become powerful.
Imagine a financial exposure that can be connected to the next generation security network. Imagine ETF shares that remain within familiar regulatory guardrails while operating on more modern rails. Imagine advisors and institutions gaining access to blockchain efficiency without having to design experimental structures.
The first tokenization narrative was “replace the incumbents.” The stronger narrative may be “upgrade companies.” It doesn’t diminish crypto; it commercializes it.
For regulators, tokenized ETFs may offer a pragmatic way forward: enabling innovation where investor protection remains intact, rather than pushing demand into parallel channels with greater uncertainty. For stock exchanges, custodian banks, brokers and market makers, it can create a new infrastructure layer around products investors already understand.
For issuers, it can become a race. The companies that combine reliable wrappers, credible assets and functional rails on the chain can capture disproportionately large flows. And for allocators, the signal may be simple: Blockchain technology is becoming less about news and more about plumbing. This is usually when the real adoption begins.
The broader lesson is that distribution often beats disruption:
Who already has trusted wrappers?
Who already has liquidity?
Who already has access to advisers, pension assets and institutions?
Who can build a bridge between old rails and new rails the fastest?
These questions point towards ETFs.
The next trillion dollars of tokenized assets may not come from inventing something completely new; they can come from upgrading what already works. Crypto’s first era was all about building outside the system. Its next era may be about running the system.
This week’s headlines
By Helene Braun
A few of crypto’s biggest debates converged this past week, as Michael Saylor’s strategy (MSTR) sold bitcoin to fund preferred stock dividends, JPMorgan CEO Jamie Dimon escalated his fight against yield-bearing stablecoins during the CLARITY Act debate, and Citi predicted tokenized securities could grow to a $5.50 trillion market at $5. Treasury and tokenized shares.
Chart of the week
RWA Perp Volume by category: Equities overtake commodities (excl. oil)
RWA perps run ~$45-60 billion per week and the flow rotates from commodities to stocks. Equities roughly tripled to ~$18 billion, just overtaking the commodities block (exc. oil), while oil faded from its macro rally in April. This implies that crypto-venue derivatives are increasingly being used for 24/7 equity exposure, with commodities now being the episodic, event-driven part.
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Note: The views expressed in this column are those of the author and do not necessarily reflect the views of CoinDesk, Inc., CoinDesk Indices, or its owners and affiliates.
