Crypto’s Big Bet: Will the Clarity Act Survive Washington’s Tight Calendar?

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Crypto’s great hope in Senate’s Clarity Act still has a path to survive tight calendarNews Analysis

What to know:

  • Some are predicting declining chances for the Clarity Act that would establish U.S. regulations for the crypto industry, but its advocates in the Senate and the industry are focused on the narrow window it still has to become law in 2026.
  • Sources close to the negotiations say final boxes are being ticked, though another two-week delay seems to have struck while a key Republican keeps negotiating with bankers who’ve objected to the U.S. treatment of stablecoin rewards programs.
  • A potential May committee action could keep the legislation on track for a passage by July, though any further delays could kill its chances.

It looks unlikely the crypto Clarity Act will pass in April, but a Senate committee hearing in May could revive the bill. Lobbyists and a legislative aide say the bill still has a chance if the full Senate votes on it by July, though progress has been slow.

With time running short this year, a Senate staffer shared with CoinDesk that a possible two-week delay – to give Senator Thom Tillis time to address concerns about stablecoin yields with bankers – wouldn’t necessarily kill the bill. The staffer also indicated that discussions about rules for decentralized finance (DeFi) are largely complete, meaning there aren’t many remaining hurdles before the committee can approve the legislation.

Even if the crypto industry overcomes banks’ resistance to stablecoin rewards, a major challenge remains: getting a bill passed through the Senate Banking Committee is just the beginning of a long process.

The Senate faces a challenging schedule as it heads into the fall. Lawmakers are set to leave Washington in August and focus on their re-election campaigns leading up to the November midterms. They have only around twelve weeks scheduled to work in Washington D.C. before the election, and a number of important issues need to be addressed, including funding for the Department of Homeland Security, disagreements about potential military action in Iran, debates over voter ID laws, and confirmation hearings for presidential nominees like Kevin Warsh to lead the Federal Reserve.

As a researcher following this legislation, I understand that if the Senate Banking Committee approves the bill, it will need to be combined with the version already passed by the Senate Agriculture Committee. According to a source close to the process, the time currently being lost to delays is actually impacting the buffer we had planned for this crucial merging of the two versions.

The proposed law is still being adjusted as lawmakers negotiate an ethics clause. Democrats want to prevent high-ranking officials, particularly former President Trump, from personally benefiting from cryptocurrency investments. While the specific wording is still being debated, this provision won’t be included in the initial version from the banking committee – it will be added later. If they can resolve this issue, along with a disagreement over fully staffing the market oversight commission, the bill has a good chance of gaining enough Democratic support to pass.

The House of Representatives would still need to vote on it, since this new version is quite different from the one they passed last year. However, that vote is expected to be fast, provided there aren’t any new issues.

Getting Trump to sign the bill is anticipated to be straightforward, although he created some doubt in March by stating he wouldn’t approve it unless Congress passed a law requiring voters to prove their citizenship.

If passed, the Digital Asset Market Clarity Act would be the second significant crypto law enacted, following last year’s GENIUS Act. However, progress on the Clarity Act has stalled since the beginning of the year due to an outstanding issue from the GENIUS Act. Bank lobbyists have successfully convinced senators that rewards programs offered by stablecoins could compete with banks’ own deposit yields, potentially harming their business.

The discussion, which has drifted away from the original goals of the Clarity Act, has involved interventions from the White House and strong statements from people within the cryptocurrency industry. Coinbase, a company that could lose significant revenue if programs offering rewards for stablecoins are limited, has been particularly vocal, with its Chief Legal Officer, Paul Grewal, sharing another statement on X (formerly Twitter) on Tuesday.

“You can’t be for CLARITY and against rewards,” he wrote. “It’s one or the other. Time to choose.”

Even though Senate negotiators recently announced a tentative agreement on a compromise, Senator Tillis indicated that making progress this April is now unlikely, and the timeline is shifting to May. The White House seems open to the idea of allowing certain rewards related to cryptocurrency, as long as they aren’t structured like interest earned on traditional bank deposits.

Patrick Witt, a former crypto advisor to President Trump, believes further attempts by banks to influence this issue can only be explained by either selfishness or a lack of understanding. He recently stated his view on X, urging people to simply accept it and move forward.

According to sources familiar with the discussions, a potential agreement is taking shape that would prohibit paying interest on products resembling insured deposits. However, companies like Coinbase would still be able to offer rewards programs similar to those offered by credit cards. Lawmakers are hesitant to release the specific wording, fearing it could reignite contentious negotiations, especially after sharing draft language with both cryptocurrency and banking industry groups last month.

As a researcher following this closely, it’s clear there’s a lot of pressure to move things forward. I recently saw a statement from Cody Carbone, CEO of the Digital Chamber, where he emphasized the importance of getting this done – he said we’ve come too far to let the effort fail. He specifically mentioned that a markup – a process of amending and debating the bill – is essential. It’s been three months since it was originally planned, and with the recent bipartisan agreement on stablecoin yields, he believes the timing is right to proceed.

With each passing day, it becomes less likely that the Clarity Act will pass. The next step should be to schedule a hearing to review and revise the bill, and to finally release the complete text that negotiators have been working on.

Galaxy, a crypto investment firm, estimates there’s about a 50% chance – and potentially less – that the CLARITY legislation will become law in 2026. Their research, to be released this week, points to numerous unresolved issues and a tight timeline as the main reasons for this uncertainty, rather than any one specific problem.

Another disagreement among negotiators could seriously derail progress, although there’s a small chance things could revive after the November elections. The end-of-year congressional session, when lawmakers finishing their terms can still pass legislation, might offer a final opportunity to reconsider the Clarity Act if it fails before then, according to some industry experts.

Despite pushing for quick decisions on current legislation, the cryptocurrency industry is focused on building long-term political influence. Crypto political action committees (PACs) have already spent millions supporting candidates from both parties in Congress. Fairshake, a major campaign finance group for the industry, strategically backs members of both parties, and many of those they support will be in the next Congress. If the Clarity Act passes, the industry will likely turn its attention to other issues, such as tax changes and potentially even creating a national bitcoin reserve.

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2026-04-22 02:01