If history has taught us anything, it’s that some of humanity’s most brilliant creations have emerged from geopolitical competition.
The logic is simple: Whether it was landing the first man on the moon, building the first atomic bomb, or today’s ongoing AI race, many of humanity’s greatest breakthroughs have been driven by fear, uncertainty, and doubt (FUD). Which raises an interesting question: If AI represents today’s technological arms race, could stablecoins be playing a similar role in the financial system?
The stablecoin race moves from debate to policy
For years, FUD around stablecoins has slowed adoption among TradFi institutions. More recently, concerns have shifted toward the potential impact of “yield-bearing” stablecoins, with some analysts warning they could disrupt core banking models. One such warning came from Jeremy Barnum, CFO of JPMorgan Chase, who flagged the risks associated with allowing stablecoins to offer yield. According to him,
The creation of a parallel banking system that… has all the features of banking, including something that looks a lot like a deposit that pays interest, without… the associated prudential safeguards that have been developed over hundreds of years of bank regulation, is an obviously dangerous and undesirable thing.”
Against this backdrop, expecting the CLARITY Act to pass seemed unlikely.
Yet market positioning suggests otherwise. The probability of the Act becoming law in 2026 recently climbed above 75% on Polymarket, signaling growing confidence among market participants. This raises a key question: If leading TradFi voices remain wary of yield‑bearing stablecoins, why is the market increasingly pricing in regulatory approval?
According to AMBCrypto, the passage may not simply reflect market expectations but rather a “strategic” inevitability shaped by global competition. Stablecoins, in this view, are increasingly positioned as the “equivalent” of the AI race, with major implications for both institutional investors and TradFi players.
Stablecoin growth is just getting started
To gauge the future of the stablecoin market, it helps to first assess its current state.
U.S. dollar‑denominated stablecoins now hold a record $320 billion in market capitalization, accounting for about 12% of the $3 trillion crypto ecosystem. Looking ahead, JPMorgan Global Research projects the market could expand to between $500 billion and $750 billion. What underpins this growth?
A key factor is usage growth. Stablecoin transaction volumes surged past $800 billion in 2025, highlighting adoption across payments and on-chain financial activity. However, a recent report from Chainalysis suggests the growth trajectory could be far more significant. As the chart below shows, stablecoin volume is projected to reach $719 trillion by 2035, implying a 90,000% increase in activity over the next decade.
With projections of this magnitude entering the conversation, it’s no surprise that more TradFi players are moving to launch their own stablecoins. Fidelity Investments, for example, recently introduced the FIDD stablecoin, describing it as a continuation of the firm’s long-term commitment to digital assets:
FIDD is the next step in Fidelity Investments’ 10+ year commitment to the digital assets ecosystem.
The key takeaway here is the “10-year commitment.” When viewed alongside Chainalysis projections, it’s clear that major TradFi players are positioning early for what they see as a long-term shift. A closer look, however, shows that this momentum isn’t limited to the United States. Against that backdrop, the passage of the CLARITY Act therefore looks less like a question of “if” and more a question of “when.”
Stablecoins enter the global competition phase
Competition in stablecoins is starting to look unavoidable as both DeFi and TradFi players move in at scale.
At the infrastructure level, there’s already increasing competition among L1s adapting to this shift. Solana [SOL], for instance, processed a record $650 billion in stablecoin transactions in February 2026. The surge in volume comes alongside growing activity from new entrants like Western Union with its USDPT initiative.
However, the competition doesn’t stop there. Stablecoin momentum outside the United States is also clearly accelerating. A recent report from the European Central Bank highlighted the growing expansion of stablecoins across Europe, framing it increasingly as a necessity rather than a choice.
The core argument is that, to remain relevant, Europe must respond by promoting euro-denominated stablecoins of its own. Otherwise, it faces a future of digital dollarization and loss of monetary sovereignty.
The key takeaway? The report points to U.S. regulatory momentum, particularly around the CLARITY Act, as a key driver of this urgency. The logic is simple: Clearer regulation reinforces expectations that the U.S. dollar will remain dominant in the stablecoin era. In that light, passing the act looks more like a strategic move to position the United States as the global crypto capital amid intensifying international competition.
The institutionalization layer begins here
Strict regulation is often the first step toward building trust.
This is where the CLARITY Act comes in. The bill aims to bring crypto exchanges under stricter oversight by requiring anti-money-laundering compliance, similar to standards followed by banks. If enacted, it would naturally give the United States a strategic advantage in the rapidly expanding stablecoin race, helping explain why President Donald Trump has repeatedly voiced support for the legislation.
As President Trump framed it:
The banks are hitting record profits, and we are not going to allow them to undermine our powerful crypto agenda that could otherwise move to China if we don’t get the CLARITY Act taken care of. The GENIUS Act was the U.S.’ first big step toward making America the crypto capital of the world, and getting the CLARITY Act done is the next step in finishing the job
Taken together, massive stablecoin growth projections and rising global competition suggest the United States is actively positioning itself to lead the next phase of digital finance. Much like the AI race, stablecoins are therefore starting to resemble a new financial arms race between major economies.
The implication is clear: the passing of the CLARITY Act looks inevitable rather than optional. Consequently, it could become a turning point for crypto markets, similar to the impact of ETFs in 2024, but potentially on a much larger scale, as it would position the U.S. at the forefront of becoming the global crypto capital.
Final Summary
- The U.S. crypto capital push is turning stablecoins into a global race, making the CLARITY Act look inevitable.
- Strong stablecoin growth and rising European competition are driving regulation and institutionalization, setting up a 2024-style turning point for crypto markets.