Crypto's Hopes for Senate Clarity Act Remain Alive Despite Tight Deadline

Although April is likely a lost month for the crypto Clarity Act, a US Senate committee hearing in May could still keep the crucial market structure legislation alive, provided it reaches a final Senate vote by July, according to lawmakers and lobbyists. The legislative calendar is running tight, but a brief delay to allow Senator Thom Tillis to finalize discussions with bankers over stablecoin-yield concerns may not be fatal. Earlier negotiations over decentralized finance protections have largely been settled, leaving few obstacles to committee approval. However, the bill must clear the Senate Banking Committee, which will be a first step among many. The Senate will adjourn in August and enter election mode until the November midterms, with only about a dozen weeks of work scheduled before the elections. The bill must be merged with a version passed by the Senate Agriculture Committee, and lawmakers must agree on an ethics piece limiting senior government officials' ability to profit from crypto interests. If these disputes are resolved, the bill may garner enough Democratic support to pass. The House would then need to approve the revised bill, which could happen quickly if further disagreements do not arise. The final step, President Trump's signature, is expected to be the easiest, although he has introduced uncertainty by stating he will not sign any bill until voter citizenship legislation is approved. The Digital Asset Market Clarity Act, if passed, would be the second major crypto bill to become law, following last year's Guiding and Establishing National Innovation for US Stablecoins Act. However, an unresolved stablecoin issue from the GENIUS Act has delayed progress on the Clarity Act, with bank lobbyists expressing concerns that stablecoin rewards programs could jeopardize their business model. The debate has sparked White House interventions and tough rhetoric from crypto insiders, with Coinbase's Chief Legal Officer Paul Grewal advocating for rewards programs. Key Senate negotiators have said they have an agreement in principle to move forward with a compromise, but the White House has leaned into the crypto position on allowing some rewards. The current version of the compromise would ban payment of yield on products that resemble insurance on deposits but would permit firms like Coinbase to structure rewards programs akin to credit-card incentives. Crypto insiders believe the odds of the Clarity Act being signed into law in 2026 are roughly 50-50, with the uncertainty stemming from the numerous unresolved questions that must be settled in sequence under severe time pressure. A single further blowup among negotiators could be a fatal delay, although the period after the November elections may offer a final opportunity for the bill to pass.