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

Although April seems like a lost opportunity for the Crypto Clarity Act, a US Senate committee hearing scheduled for May could still keep the crucial market structure legislation alive, provided it reaches a final Senate vote by July, according to lawmakers and lobbyists tracking the bill's slow progress. The legislative calendar is running out of time, but a possible two-week delay to allow Senator Thom Tillis to finalize discussions with bankers over stablecoin-yield concerns may not necessarily push the effort beyond the point of no return. Earlier negotiations on decentralized finance protections have been largely settled, leaving few obstacles in the way of committee approval. One of the main challenges the crypto industry faces is the banking sector's objections to stablecoin rewards, but if this hurdle can be overcome, the bill will still need to clear the Senate Banking Committee hearing, which would be only the first step in a lengthy process. The Senate will essentially recess in August and be in election mode until the November congressional midterms, with about a dozen weeks of work scheduled before the elections, including pressing matters such as funding for the Department of Homeland Security and nominations like President Trump's pick for the Federal Reserve, Kevin Warsh. If the bill manages to get approval from the Senate Banking Committee, it will need to be merged with the version passed by the Senate Agriculture Committee, which is the timing cushion that current delays are eating into. The final legislation will likely undergo further revisions as lawmakers add their final compromise on an ethics piece limiting senior government officials from profiting off crypto interests. The bill may win enough Democratic support to pass if it can get past disputes over appointing commissioners to oversee market regulation. Then, the House will need to approve it again, which is expected to go quickly, unless further disagreements arise. The last step, President Trump's signature, is expected to be the easiest, although he introduced some uncertainty in March when he said he wouldn't sign any bill until legislation is approved requiring voters to prove citizenship before casting ballots. The Digital Asset Market Clarity Act, if approved, would become the second major crypto bill to become law, joining last year's Guiding and Establishing National Innovation for US Stablecoins Act. However, an unresolved stablecoin matter from the GENIUS Act has delayed progress on the Clarity Act since the start of the year, as bank lobbyists have drawn enough support from senators to back their concerns that stablecoin rewards programs could jeopardize the banks' business model. The debate has raged on, with the White House intervening and crypto insiders using tough rhetoric. Although key Senate negotiators had recently said they had an agreement in principle to move forward with a compromise, Senator Tillis told reporters that earlier hopes for April progress were likely slipping into May. The White House has supported the crypto position on allowing some rewards that don't resemble interest on core bank deposits. In the current version, insiders say the compromise has hovered around an approach that would ban payment of yield on products that look or act like insurance on a deposit but would still allow firms like Coinbase to structure rewards programs akin to credit-card incentives. Lawmakers have been hesitant to release text that could spark further negotiation drama, after allowing both crypto and banking industry representatives to review language last month. Every day that passes without progress marks a decline in the odds for eventual Clarity Act success, with the very next action being the scheduling of the markup hearing and the sharing of the long-awaited bill text. The odds of the Clarity Act being signed into law in 2026 are roughly 50-50, and possibly lower, according to a research note by crypto investment firm Galaxy, with the uncertainty stemming not from any single issue but from the sheer number of 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 could offer a final low-odds, last-ditch opening. While crypto lobbyists are desperate for immediate action on the legislation, the industry is playing the long game on the political front, with crypto PACs devoting millions of dollars to build a list of friends in Congress from both parties.