April appears to be a lost cause for the Cryptocurrency Clarity Act, but a U.S. Senate committee hearing sometime in May could keep critical market structure legislation alive as long as it can reach a final vote by the broader Senate in July, according to lobbyists and a lawmaker aide focusing on the slow progress of the market structure bill.
The legislative calendar is running out of room this year, but a Senate aide told CoinDesk that a possible new delay of a couple of weeks, which would allow Republican Senator Thom Tillis to finish discussions with bankers over concerns about the performance of stablecoins, is not yet taking this work past the point of no return. The aide also said that previous negotiations over decentralized finance (DeFi) protections were effectively resolved, leaving few further impediments to committee approval.
One of the main issues facing the crypto industry (if it can overcome the stubborn hurdle of banking sector objections to stablecoin rewards) is that the Senate Banking Committee hearing on passing the bill would be just the first step of many.
Here’s the whirlwind of scheduling now surrounding the effort: The Senate will essentially flee Washington in August and be in election mode until the congressional midterm elections roll around in November. He’s currently scheduled for about a dozen weeks of work in D.C. before the election, and he has some pressing matters on his hands during that time, including the battle over funding for the Department of Homeland Security, clashes over the Iran war, the debate over voter ID, and dealing with nominations like that of President Donald Trump’s nominee to head the Federal Reserve, Kevin Warsh.
If the bill ultimately manages to win approval from the Senate Banking Committee, the text must be merged with the version approved by the Senate Agriculture Committee. That fusion work is the time cushion these current delays are eating up, the aide said.
The final legislation is likely to be revised further as lawmakers add their final compromise on an ethics piece in which Democrats wanted to limit top government officials (most notably President Trump) from profiting from crypto interests. The aide said comments are now circulating on that point, but it won’t be in the banking dashboard version and will be added later. If they can overcome that dispute and another demand over appointing a full slate of commissioners to oversee regulation of the markets, the bill could gain enough Democratic support to pass.
Then the House would need to approve it again, because it is very different from the version that that chamber already advanced last year. But this is expected to happen quickly, as long as no further disagreements arise.
The last step, Trump’s signature, is expected to be the easiest, although he introduced some uncertainty in March when he said he would not sign any bills until legislation was passed that would require voters to prove their citizenship before they could vote.
The Digital Asset Market Clarity Act, if passed, would become the second major cryptocurrency bill to become law, joining last year’s Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. But it is an unresolved stablecoin issue from the GENIUS Act that has delayed progress on the Clarity Act since the beginning of the year, as banking lobbyists have garnered enough support from senators to back their concern that stablecoin rewards programs could be close enough to deposit yields to jeopardize banks’ business model.
The debate, far removed from the central objectives of the Clarity Act, has spread through interventions from the White House and harsh rhetoric from crypto experts. Coinbase, which could take a substantial hit if stablecoin rewards programs are scaled back, has been at the forefront, with Chief Legal Officer Paul Grewal posting another boost on social media site X on Tuesday.
“You cannot be for CLARITY and against rewards,” he wrote. “It’s one or the other. It’s time to choose.”
Although key Senate negotiators had recently said they had “agreement in principle” to move forward with a compromise, Republican Sen. Tillis told reporters that earlier hopes for progress in April were likely fading toward May. The White House has leaned into the crypto position by allowing some rewards that don’t look like interest on central bank deposits.
“It’s hard to explain that any additional pressure from banks on this issue is motivated by anything other than greed or ignorance,” said Patrick Witt, a top crypto advisor in the Trump White House, in a recent post on X. “Move on.”
In the current version, insiders say the compromise has consistently revolved around an approach that would ban performance payments for any product that looks or acts like insurance on a deposit, but would still allow companies like Coinbase to structure rewards programs that would be more akin to credit card incentives. But lawmakers have been shy about releasing language that could spark more drama in the negotiations, after allowing banking and cryptocurrency industry representatives to review the language last month.
“We are too close to let this effort fail,” Cody Carbone, CEO of the Digital Chamber, said in a statement to CoinDesk. “There must be room to move this forward. It’s been three months since it was initially scheduled, and given the progress on all issues, especially the bipartisan stablecoin performance deal, now is the time.”
Every day that passes without progress marks a decrease in the odds of eventual success of the Clarity Law. The next action should be to schedule the margin hearing and share the long-awaited text of the bill that negotiators have been fighting over.
“In our view, the odds of CLARITY becoming law in 2026 are approximately 50-50, and possibly lower,” according to a research note that crypto investment firm Galaxy plans to publish this week. “Uncertainty arises not from a single issue, but from the large number of unresolved issues that must be resolved sequentially under severe time pressure.”
In other words, a new flare-up among negotiators could be a fatal delay, although the period after the November election could offer a last-ditch opening with little chance. The so-called “duck out” session of Congress at the end of the year may be a period in which the outgoing Congress can still act, and more than one crypto expert has suggested that it is not outside the realm of possibility that a hypothetically derailed Clarity Act could reappear at that time.
While crypto lobbyists are desperate for immediate action on legislation, the industry is playing the long game on the political front. Crypto PACs have already dedicated millions of dollars to continue adding to the list of their friends in Congress from both parties. The sector’s main campaign finance arm, Fairshake, is careful to back members of both parties, and many of its political appointees will join Congress next year. If the Clarity Act is law by then, there will likely be other pressing legislative matters for the industry, which could include a tax overhaul and the establishment of a federal bitcoin reserve. .
