Crypto Clarity Act Faces Tight Deadline in Senate, but Still Has a Chance to Pass

The prospects for the crypto Clarity Act appear bleak in April, but a potential US Senate committee hearing in May could revive the critical market structure legislation, as long as it reaches a final vote by July, according to insiders. The legislative calendar is running out of time, but a brief delay may not be fatal. Earlier negotiations over decentralized finance protections have been largely settled, leaving few obstacles in the way of committee approval. However, the banking sector's objections to stablecoin rewards remain a significant hurdle. The Senate Banking Committee hearing is only the first step, and the bill must be merged with the version passed by the Senate Agriculture Committee. The final legislation may be revised further to address ethics concerns and market regulation. If the bill passes the Senate, it would need to be approved by the House, which could happen quickly if disagreements are minimal. The last step, President Trump's signature, is expected to be the easiest, although he has introduced some uncertainty. The Digital Asset Market Clarity Act, if approved, would be the second major crypto bill to become law, following last year's GENIUS Act. The debate over stablecoin rewards has delayed progress on the Clarity Act, with bank lobbyists expressing concerns that these programs could jeopardize their business model. The White House has intervened, and crypto insiders have pushed back against the banks' concerns. A compromise has been proposed, which would ban yield payments on products that resemble insurance on deposits but allow rewards programs similar to credit-card incentives. The odds of the Clarity Act's success are roughly 50-50, according to a research note, due to the sheer number of unresolved questions that must be settled under time pressure. A single further disagreement could be a fatal delay, although the period after the November elections may offer a final opportunity for passage.