Crypto Legislation Still Has a Chance of Passing Despite Tight Deadline

The prospects for the crypto Clarity Act appear dim for April, but a potential US Senate committee hearing in May could keep the vital market structure legislation alive, provided it can secure a final Senate vote by July, according to industry lobbyists and a legislative aide. The legislative calendar is 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 on decentralized finance protections have been largely settled, leaving few obstacles to committee approval. However, the banking sector's objections to stablecoin rewards pose a significant challenge. The Senate Banking Committee hearing is just the first step in a lengthy process, with the Senate set to recess in August and enter election mode until the November midterms. If the bill clears the committee, it must be merged with the version passed by the Senate Agriculture Committee, and lawmakers must reach a compromise on an ethics piece. The final legislation may undergo further revisions before being put to a vote. The House would then need to approve the revised bill, which could be a quick process if disagreements are minimal. The last hurdle would be President Trump's signature, which is expected to be the easiest step, although he has introduced uncertainty by stating he won't sign any bill until voter citizenship legislation is passed. The Digital Asset Market Clarity Act, if approved, would be the second major crypto bill to become law, following last year's GENIUS 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 intense rhetoric from crypto insiders, with Coinbase's Chief Legal Officer Paul Grewal arguing that you can't support clarity and oppose rewards. Key Senate negotiators have reached an agreement in principle, but the White House has leaned into the crypto position on allowing some rewards. The current compromise approach would ban yield on products that resemble insurance on deposits but permit firms like Coinbase to structure rewards programs similar to credit-card incentives. Crypto industry representatives are urging lawmakers to schedule a markup hearing and share the long-awaited bill text. Every day without progress reduces the odds of the Clarity Act's success, with crypto investment firm Galaxy estimating the chances of the bill being signed into law in 2026 at roughly 50-50. While the period after the November elections may offer a final opportunity, crypto lobbyists are playing the long game, devoting millions of dollars to building support in Congress from both parties.