Crypto Clarity Act Faces Time Crunch in Senate

The US Senate's Digital Asset Market Clarity Act is facing a tight deadline, but a potential committee hearing in May could save it from expiring. Despite the legislative calendar running out of time, a Senate aide believes a couple of weeks' delay to address stablecoin-yield concerns won't be fatal. The bill needs to clear the Senate Banking Committee, which would be the first step in a lengthy process. The Senate will be in election mode until the November midterms, and pressing matters like funding for the Department of Homeland Security and nominations will take priority. If the bill gets signoff from the Senate Banking Committee, it will need to be merged with the version passed by the Senate Agriculture Committee. Further revisions are expected, including an ethics piece to limit government officials from profiting from crypto interests. The final legislation may win enough Democratic support to pass, but it would need to be approved by the House again due to significant differences from the previous version. The last step would be President Trump's signature, which is expected to be the easiest. The Clarity Act would be the second major crypto bill to become law, following last year's GENIUS Act. However, an unresolved stablecoin matter from the GENIUS Act has delayed progress on the Clarity Act. The debate over stablecoin rewards programs has been ongoing, with bank lobbyists backing their concerns and crypto insiders pushing for rewards. The White House has leaned into the crypto position, allowing some rewards that don't resemble interest on core bank deposits. The current compromise approach would ban yield on products that look or act like insurance on a deposit but allow firms to structure rewards programs akin to credit-card incentives. The odds of the Clarity Act being signed into law in 2026 are roughly 50-50, with the uncertainty stemming from unresolved questions and time pressure. A single further blowup among negotiators could be a fatal delay, although the period after the November elections could offer a final opportunity. Crypto lobbyists are pushing for immediate action, while the industry plays the long game on the political front, with crypto PACs backing members of both parties and preparing for next year's Congress.