Washington is nearing the establishment of a historic regulatory framework for cryptocurrency; however, disagreements surrounding decentralized finance (DeFi) and stablecoin rewards may delay the bill’s final approval until after 2026. The Clarity Act aims to provide clear and robust rules for the cryptocurrency market to ensure investor protection and enhance transparency within the financial system. DeFi, an autonomous financial system based on blockchain technology, challenges traditional financial institutions and has sparked complex debates among government agencies regarding its regulation. Stablecoins, a type of cryptocurrency generally pegged to a stable asset like the US dollar, are considered vital for financial stability but their reward policies have also become contentious. With the growing significance of cryptocurrencies and their platforms, governments and regulatory bodies worldwide are working to draft laws to reduce financial crimes and fraud. In the US, approval of the Clarity Act would grant legal recognition to the crypto industry, but failure to reach consensus on DeFi and stablecoin issues could delay the process. The cryptocurrency sector is expected to face regulatory challenges in the coming years, potentially impacting market growth and investment trends. Lawmakers strive to stabilize the market through balanced and comprehensive legislation, aiming to make cryptocurrency an integral part of the future financial system.
Source: coindesk
