U.S. CLARITY Act Signals Stablecoins’ Shift Into Core Financial Infrastructure, DBS Says

Progress on the U.S. ‘CLARITY Act’ is being treated by markets as just another step in Washington’s long regulatory slog. Singapore’s largest bank, DBS, argues it is something bigger: a ‘structural turning point’ that accelerates stablecoins’ shift from a simple trading tool into ‘productive financial infrastructure’—and a key bridge between the banking system and onchain capital markets.

In a May 14 edition of its Crypto Digest, DBS strategists Chang Wei Liang and Chee Zheng Feng described the Digital Asset Market Clarity Act as a “constructive compromise” that attempts to balance banking stability with digital-asset innovation. Their note landed the same day the U.S. Senate Banking Committee advanced the bill on a 15–9 vote, sending it to the full Senate. All 13 Republicans on the committee supported the measure, joined by Democratic Senators Ruben Gallego and Angela Alsobrooks.

The committee vote marked the bill’s first Senate milestone roughly 10 months after the House passed it 294–134 in July 2025. The next hurdle is steeper: to clear the Senate, supporters must reach the 60-vote threshold typically needed to overcome a filibuster. With 53 Republicans in the chamber, the math implies at least seven Democratic votes would be required if party lines hold.

A line drawn on stablecoin ‘yield’

DBS put particular emphasis on a provision that has become the political and industry flashpoint: stablecoin ‘yield.’ The bill would prohibit interest-like returns paid simply for holding a stablecoin—treating that behavior as too close to deposit-like products—while permitting rewards linked to real usage such as transactions, payments, and certain forms of staking or platform activity.

The compromise language, negotiated for more than four months by Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks, survived intense bank lobbying, according to DBS. The American Bankers Association and other groups urged lawmakers to reject the approach, with reports of more than 8,000 letters sent to the Senate in opposition. Still, the negotiated framework remained intact.

Coinbase ($COIN) Chief Legal Officer Paul Grewal framed the difference as preserving incentives tied to “actual participation” rather than passive holding. DBS’s assessment is that the design addresses a core banking concern—deposit flight—without stripping crypto platforms of the ability to encourage activity and build payment-based ecosystems.

The stakes are not abstract. DBS noted that U.S. banks fund roughly 80% of lending from customer deposits. By banning passive yield, policymakers effectively protect banks’ funding base. At the same time, allowing usage-based rewards nudges stablecoins from ‘buy-and-hold’ toward ‘buy-and-use,’ reinforcing their potential role as a settlement rail embedded in everyday financial flows.

From cash-equivalent to ‘productive’ asset

DBS argued the longer-term implication is that stablecoins could be treated less like static cash equivalents and more like assets with ‘productive’ use cases—generating revenue opportunities across issuance, custody, and payment and clearing infrastructure. That shift matters to both fintech firms and incumbent financial institutions, because the earnings pool moves from simply minting tokens to owning the rails and services around them.

Regulatory clarity could also entrench existing leaders. Citing DeFiLlama data, DBS said Tether (USDT) holds about 59% of stablecoin market share and USD Coin (USDC) about 24%, for a combined 83%. Sky Dollar accounts for roughly 3%, while other issuers split the remaining 14%.

As regulatory frameworks harden, DBS expects compliance capability and capitalization to become even more decisive—factors that tend to favor incumbents. Circle’s Dante Disparte, the company’s chief strategy officer, nonetheless described the compromise as meaningful progress, calling it a signal that the U.S. has chosen to lead rather than be pulled along in digital-asset policy.

Crypto markets rise alongside institutional inflows

DBS also tied the policy moment to renewed strength in major cryptoassets and steady institutional demand. From late March through early May, Bitcoin (BTC) rose about 18% and Ethereum (ETH) about 8%, broadly comparable to gains in U.S. equities over the period, while gold traded largely flat, according to the report.

Flows supported the price action. DBS estimated roughly $2 billion in net inflows into spot Bitcoin ETFs, while digital-asset treasury companies continued accumulating. Strategy—formerly MicroStrategy—was cited as purchasing an additional ~$4 billion in BTC.

On the Ethereum side, the report pointed to about $356 million of net inflows into Ethereum ETFs and roughly $760 million in ETH purchases by BitMine, for a combined ~$1 billion. DBS noted the purchases represented about 0.4% of Ethereum’s market capitalization as of late March—similar in magnitude to Bitcoin’s ~$6 billion of buying pressure equating to about 0.45% of its market cap. As of May 12, DBS cited BTC at $80,526 and ETH at $2,278.

The deeper signal: ‘financial integration,’ not just regulation

DBS’s central argument is that investors are misreading the signal. The key development is not merely that U.S. regulation is advancing, but that stablecoins are being pulled into the core logic of the financial system. In DBS’s framing, banks are increasingly treating stablecoins not as an external crypto experiment but as part of the future ‘monetary stack’—a base layer for payments, settlement, and programmable finance.

This has direct implications for tokenization, particularly real-world assets (RWA). ‘Programmable assets’ require ‘programmable liquidity,’ and stablecoins are rapidly becoming the settlement layer connecting traditional finance with onchain markets. If the RWA market is to scale, DBS argues, the payment and settlement infrastructure must be legally grounded first—and the CLARITY compromise begins to outline that foundation.

Implications beyond the U.S., including Korea

DBS also highlighted how the U.S. template could influence jurisdictions debating local-currency stablecoins. In Korea, where discussions around a won-pegged stablecoin framework are ongoing, a “ban passive yield but allow usage incentives” model could become an attractive middle ground—addressing commercial banks’ concerns about demand-deposit outflows while preserving fintechs’ ability to build user engagement through payments and related activity.

The bank suggested that, if regulatory clarity emerges, well-capitalized players with strong compliance operations—such as internet banks and large fintech platforms—could find new business lines in issuance, custody, and payment infrastructure. For won-pegged projects, the U.S. model presents both opportunity and constraint: it may legitimize issuance and usage under clear rules, but it also limits business models that rely on passive returns.

DBS concluded that even if final passage remains uncertain—and implementation may not arrive until 2027 at the earliest—the Senate committee vote is an early marker of where the global rulebook is heading. For markets, the bank’s message was blunt: the stablecoin story is shifting from speculative tokens to financial plumbing, and underestimating that integration could mean missing the next phase of crypto’s institutionalization.