April appears to be a lost cause for the crypto Clarity Act, but a U.S. Senate committee hearing sometime in May could keep the critical market structure legislation alive as long as it can reach a final vote in the overall Senate before July, according to lobbyists and a legislative aide focused on the market structure bill’s slow progress.
The legislative calendar is running out of space for this year, but a Senate aide told CoinDesk that a potential new delay of a few weeks — allowing Republican Sen. Thom Tillis to finish discussions with bankers about concerns about stablecoin dividends — does not yet push this work past the point of no return. The aide also said previous negotiations over decentralized finance (DeFi) protections have effectively been settled, leaving few other obstacles in the way of committee approval.
One of the main issues facing the crypto industry (if it can jump the stubborn hurdle of banking industry objections to stablecoin rewards) is that the Senate Banking Committee hearing that the bill must be cleared would only be the first step of many.
Here’s the planning maelstrom around which the effort now revolves: The Senate will essentially flee Washington in August and be in election mode until the congressional midterms arrive in November. It’s currently scheduled for about a dozen weeks of DC work before the election, and it has some pressing issues on its plate during that time, including the Department of Homeland Security funding battle, clashes over the Iran war, the voter ID debate and addressing nominees like President Donald Trump’s pick to head the Federal Reserve, Kevin Warsh.
If the bill finally succeeds in being signed by the Senate Banking Committee, the text must be merged with the version that passed the Senate Agriculture Committee. That merger work is the timing cushion that these current delays are eating away at, the aide said.
The final legislation is likely to be revised further as lawmakers add their final compromise on an ethics piece where Democrats wanted to restrict high-ranking officials (most notably President Trump) from benefiting from crypto interests. The aide said that language is now circulating back and forth on that point, but that it will not be in the banking panel’s version and will be added later. If they can get past this dispute and another requirement to appoint a full slate of commissioners to oversee market regulation, the bill could win enough Democratic support to pass.
Then the Parliament would have to approve it again because it is very different from the version that the chamber already developed last year. But it is expected to go quickly as long as no further disagreements arise.
The final step, Trump’s signature, is expected to be the easiest, although he introduced some uncertainty in March when he said he would not sign a bill until he approves legislation that would require voters to prove their citizenship before they can cast ballots.
The Digital Asset Market Clarity Act, if approved, would be the second major crypto bill to become law, joining last year’s Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. But it is an unresolved stablecoin case from the GENIUS Act that has delayed progress on the Clarity Act since the start of the year, as bank lobbyists have drawn enough support from senators to support their concerns that stablecoin reward programs may be close enough to deposit yields that it jeopardizes the banks’ business model.
The debate – far removed from the central goals of the Clarity Act – has raged through interventions from the White House and harsh rhetoric from crypto insiders. Coinbase, which stands to take a significant hit if stablecoin rewards programs are curtailed, has been on the front lines, and Chief Legal Office Paul Grewal posted on social media X on Tuesday with another push.
“You can’t be for CLARITY and against rewards,” he wrote. “It’s one or the other. Time to choose.”
Although key Senate negotiators had recently said they had an “agreement in principle” to move forward with a compromise, Republican Sen. Tillis told reporters earlier hopes for progress in April would likely slide into May. The White House has leaned into the crypto position to allow some rewards that don’t look like interest on core bank deposits.
“It’s hard to explain any further lobbying by banks on this issue as motivated by anything other than greed or ignorance,” said Patrick Witt, a top crypto adviser in the Trump White House, in his own recent post on X. “Go ahead.”
In the current version, insiders say the compromise has steadily hovered around an approach that would ban the payment of returns on any product that looks or acts as insurance on a deposit, but that would still let firms like Coinbase structure rewards programs that would be more akin to credit card incentives. But lawmakers have been coy about releasing text that could spark further negotiating drama, after having both crypto and banking industry representatives review the language last month.
“We are too close to letting this effort fail,” Cody Carbone, CEO of the Digital Chamber, said in a statement to CoinDesk. “A markup needs to happen to move this forward. It’s been three months since it was originally planned, and given the progress on all issues, especially the bipartisan stablecoin return agreement, now is the time.”
Every day that passes without progress marks a decrease in the odds of eventual Clarity Act success. The next action should be the scheduling of the markup hearing and the sharing of the long-awaited legislative text that the negotiators have been fighting over.
“In our view, the odds of CLARITY being signed into law in 2026 are about 50-50 and possibly lower,” according to a research note that crypto investment firm Galaxy plans to publish this week. “The uncertainty does not stem from a single problem, but from the large number of unresolved issues that must be resolved in sequence under severe time pressure.”
In other words, a single further explosion among the traders could be a fatal delay, although the post-November election period could offer one last opening with low odds. The so-called “lame duck” session of Congress at the end of the year may be a period when the outgoing Congress can still act, and more than one crypto insider has suggested that it is not out of the realm of possibility that a hypothetically derailed Clarity Act could resurface.
While crypto lobbyists are desperate for immediate action on the legislation, the industry is playing the long game on the political front. Crypto PACs have already spent millions of dollars to keep adding to the list of friends in Congress from both parties. The industry’s leading campaign finance arm, Fairshake, is careful to support members of both parties, and many of their political picks will join next year’s Congress. If the Clarity Act is law by then, there will likely be other pressing legislative issues for the industry, potentially including a tax overhaul and the establishment of a federal bitcoin repository .
