Welcome to your morning briefing on what happened in the crypto markets overnight and what's expected during the coming day.

U.S. credit unions joined banks in rejecting reward payments for holding stablecoins while crypto traders await U.S. inflation data that could boost bitcoin buying.

The Digital Asset Market Clarity Act is a proposed regulatory framework that categorizes digital assets into three main categories: digital commodities like bitcoin (BTC) and ether (ETH) overseen by the CFTC, investment contract assets regulated by the SEC and permitted payment stablecoins. Credit unions, banks and crypto firms disagree on the payment of interest on stablecoin holdings.

They seem to have secured a win for now. Senate lawmakers released an updated draft on Tuesday morning, prohibiting digital asset service providers from paying "any form of interest or yield" solely for holding payment stablecoins.

Whatever the outcome, analysts are optimistic the passage of the bill will likely catalyze a new record high for BTC and the broader market.

"The CLARITY Act is the Punxsutawney Phil of this crypto winter. If it sticks its head out but fails in Congress, the winter could continue," Matthew Hougan, chief investment officer at Bitwise, said on X. "If instead it passes and is signed into law, we're heading to new all-time highs."

Prediction markets currently pencil in an 80% chance of the act being signed into law this year.

In crypto markets, the top 10 tokens by market capitalization, including bitcoin, ether, XRP and solana, traded 1%-2% higher over 24 hours. The broader market showed strength, with XMR, IP and MYX all adding more than 15% and the CoinDesk 80 Index trading 3% higher.

Still, traders are holding back, according to Samer Hasn, a senior market analyst at XS.com. They are waiting for U.S. December inflation data due at 8:30 a.m.

The consumer price index rose 2.6% year-on-year, according to estimates on FactSet, slowing from November's 2.7%. A lower could strengthen Fed interest-rate cut bets, sending bitcoin higher alongside other risk assets.

"A softer data may allow bitcoin and equities to regain momentum," Vikram Subburaj, CEO of Giottus.com, said in an email. A hotter-than-expected figure, however, could weaken rate-cut bets, embolden dollar bulls and hurt risk sentiment.

Note that JPMorgan is no longer predicting a rate cut this year and suggests an increase in borrowing cost is likely for 2027.

Stay alert!

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While You Were Sleeping

• Trump-linked World Liberty Financial-connected firm applies for federal bank charter (CoinDesk): The proposed trust would enable the firm to directly issue, custody and redeem its USD1 stablecoin under OCC oversight, targeting institutional clients such as exchanges and market makers.
• Zcash developer team behind ECC quits after governance clash with Bootstrap board (CoinDesk): The CEO of Electric Coin Company, a key developer of Zcash, wrote on X that a majority of Bootstrap’s board members had moved into "clear misalignment" with what he described as Zcash’s mission.
• This is what's (currently) in the way of U.S. crypto market structure bill harmony (CoinDesk): Disputes over ethics rules for officials, DeFi oversight, stablecoin yield limits and regulator staffing remain unresolved as lawmakers rush toward Senate markups.
• Colombia looks to turn the page with U.S. after Petro–Trump call (Bloomberg): Trump invited Petro to Washington, and both sides agreed to reopen direct communication channels and to cooperate on drugs and Venezuela following earlier U.S. threats against Colombia.

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