The Digital Asset Market Clarity Act — the most consequential piece of U.S. crypto market structure legislation since the GENIUS Act — faces a 10-week window to clear the Senate before midterm politics functionally kill it. Polymarket prices passage at 46%, down from 82% in February. Galaxy Digit...
"We are going to markup the Clarity Act in May. We are going to get it to the finish line." — Senator Cynthia Lummis (R-WY), Senate Banking Committee
The Digital Asset Market Clarity Act — the most consequential piece of U.S. crypto market structure legislation since the GENIUS Act — faces a 10-week window to clear the Senate before midterm politics functionally kill it. Polymarket prices passage at 46%, down from 82% in February. Galaxy Digital's head of research Alex Thorn puts the odds at "roughly 50-50, and possibly lower."
Senator Thom Tillis (R-NC), who had been the bill's most vocal internal critic, told reporters on April 29 that stablecoin yield disputes have been "largely addressed" and that he will encourage Chairman Tim Scott to schedule a committee markup. The earliest plausible date is the week of May 11. If the markup slips past mid-May, according to Thorn, "the probability of enactment in 2026 will drop sharply." Congress breaks for Memorial Day on May 21, and after stripping out scheduled recesses, the Senate has approximately 9–10 working weeks remaining in the session.
The bill passed the House 294–134 in July 2025 with bipartisan support. It has not moved through the Senate Banking Committee. Three unresolved issues — stablecoin yield restrictions, DeFi developer protections, and ethics provisions targeting executive branch crypto holdings — have consumed nine months of negotiation.
The Clarity Act (H.R. 3633), formally the Digital Asset Market Clarity Act of 2025, was introduced by House Financial Services Committee Chairman French Hill on May 29, 2025. It passed the House on July 17, 2025, by a vote of 294–134. The Senate Agriculture Committee held its markup in January 2026. The Senate Banking Committee has not yet acted.
Senator Cynthia Lummis stated on April 28 that "stablecoin language and the market structure provisions are almost 99% sorted out." Senator Tillis, who controls the key swing vote on the Banking Committee, confirmed on April 29 that he would encourage Chairman Scott to schedule a markup, signaling that the stablecoin yield dispute — the bill's primary obstacle — has been substantially resolved.
The remaining legislative calendar is tight. Senator Bernie Moreno (R-OH) has set an effective deadline: the bill must clear Congress by the end of May, or risk indefinite shelving until at least 2030. Ji Kim, CEO of the Crypto Council for Innovation, noted 13 weeks remain on the Senate floor calendar, though the effective working time is closer to 9–10 weeks after recess deductions.
The Clarity Act draws a jurisdictional line between the SEC and the CFTC over digital assets. Its core provisions:
CFTC jurisdiction over digital commodities. The Act grants the CFTC "exclusive jurisdiction" over spot markets in digital commodities — the category that would include Bitcoin, Ether, and most tokens that have reached sufficient decentralization. Intermediaries handling digital commodities, including crypto exchanges, must register with the CFTC and meet capital, risk management, recordkeeping, and customer protection standards.
SEC jurisdiction over investment contract assets. The SEC retains authority over issuers and issuances of investment contract assets, including registration and reporting requirements. Tokens sold as part of investment contracts remain under securities law.
Qualified Digital Asset Custodian requirement. Digital assets must be held with a Qualified Digital Asset Custodian supervised by an appropriate state or federal banking regulator, the CFTC, or the SEC. Customer funds must be segregated.
DeFi safe harbor. The Act provides an explicit safe harbor for "fully decentralized" protocols with no identifiable issuer or controlling party, exempting them from both CFTC and SEC registration. The bar for qualification is high: protocols with admin keys, upgradeable contracts, or founding team governance dominance may not qualify. Front-end operators interacting with DeFi are explicitly subject to compliance standards.
The single issue that consumed more legislative time than any other: whether stablecoin issuers or third parties can offer passive yield — returns for simply holding stablecoins.
The banking sector opposed yield on stablecoins, arguing it would siphon deposits from traditional banks and erode community banks' lending base. Patrick Witt, the Trump White House's crypto adviser, pushed back publicly, stating: "It's hard to explain any further lobbying by banks on this issue as motivated by anything other than greed or ignorance. Move on."
A compromise was reached on March 20, 2026. The current Senate draft bans passive yield on stablecoin balances but permits "activity-based rewards" tied to payments, transfers, or platform usage. The SEC, CFTC, and Treasury are given 12 months after enactment to define what qualifies as an activity-based reward versus a prohibited passive yield.
Senator Tillis confirmed on April 29 that compromise text on stablecoin yield would be released to stakeholders "days before the hearing," giving the industry a review window before the committee vote. He stated the work has "addressed a lot of the concerns" of banking lobbyists who argued interest-bearing deposits were under threat.
The second major unresolved issue involves the Blockchain Regulatory Certainty Act (BRCA), embedded in the Senate draft of the Clarity Act. The BRCA amends Section 1960 of the U.S. Code — a statute originally designed to combat money laundering — to clarify that non-custodial software developers are not money transmitters.
Specifically, the provision exempts developers who "develop or maintain distributed ledger technology but do not have the legal right or unilateral ability to control, initiate, or effectuate transactions involving users' digital assets without third-party approval." Crypto advocates view this language as essential. Some regulatory quarters have pushed back, arguing it could create enforcement gaps.
Senator Tillis addressed concerns about how existing criminal statutes would apply to DeFi and software developers, without providing final language. This remains an active point of negotiation.
The third sticking point: ethics language aimed at preventing senior government officials from profiting off crypto interests. The provision restricts executive branch crypto holdings and has drawn objections from some Republican members who view it as overreach. Details of the ethics text have not been publicly released. Its resolution is considered a prerequisite for the markup to proceed.
On April 23, more than 120 crypto organizations signed a joint letter coordinated by the Crypto Council for Innovation and the Blockchain Association, addressed to the Senate Banking Committee, urging an immediate markup. Signatories included Coinbase, Ripple, Kraken, Circle, and a16z.
The letter called on Senate leadership to schedule a markup "as soon as practicable." This represents the most coordinated industry lobbying push since the bill cleared the House in July 2025. The crypto industry spent $133 million in political campaign contributions during the 2024 cycle, according to Galaxy Digital, providing context for the political weight behind the push.
According to Galaxy Digital's analysis, five sequential steps must succeed for the Clarity Act to become law in 2026:
Each step is sequential. Failure at any point kills the bill for 2026. A floor vote in July is "theoretically possible," according to Thorn, but would demand "extraordinary political will." The Senate calendar is packed with competing priorities: Iran military debates, DHS funding, and presidential nominations.
The GENIUS Act, signed into law on July 18, 2025, established the first federal regulatory framework for payment stablecoins. Its implementing regulations are due by July 18, 2026. The OCC, FDIC, National Credit Union Administration, Treasury, and FinCEN have all issued proposed rules, with comment deadlines in June 2026.
The Clarity Act and GENIUS Act interact in two key areas. First, the stablecoin yield language in the Clarity Act's Senate draft creates a direct conflict with the GENIUS Act's more permissive framework. The March compromise attempts to resolve this by distinguishing passive yield (banned) from activity-based rewards (permitted). Second, the Clarity Act's market structure provisions would overlay the GENIUS Act's stablecoin-specific framework with broader jurisdiction rules governing all digital assets.
If the GENIUS Act's implementing regulations finalize before the Clarity Act passes, crypto issuers may face regulatory requirements that are later superseded or modified by Clarity Act provisions — creating a compliance sequencing problem for the industry.
Polymarket's "Clarity Act signed into law in 2026?" contract has attracted $574,835 in trading volume. The current probability stands at approximately 46%. The trajectory tells the story: odds peaked at 82% in February, dropped to 64% by April 18, and fell to 43% before recovering slightly to 46% following Tillis's April 29 comments.
Kalshi, another prediction market platform, prices passage at 15% before July and 37% before August.
Galaxy Digital's Thorn separately estimates odds at 50-50, citing as supporting factors: Trump's executive orders backing crypto, Senator Tim Scott's Banking Committee leadership, the successful GENIUS Act passage, and the industry's campaign spending. Against those factors: the sheer number of unresolved questions, competing Senate floor priorities, and the approaching midterm election cycle.
The Clarity Act is closer to a Senate markup than at any point since the House passed it nine months ago. Senator Tillis's shift from critic to advocate for scheduling the vote removes what had been the primary internal obstacle. The stablecoin yield compromise, while not yet public in final text, appears to have satisfied enough stakeholders to allow the process to advance.
The math, however, remains unforgiving. Five sequential legislative hurdles in 9–10 working weeks, with a packed Senate calendar and midterm campaign pressures mounting, explains why prediction markets assign odds below 50%. The bill's supporters argue the political infrastructure is in place: bipartisan House passage, White House support, and the largest coordinated industry lobbying effort in crypto's history. Its opponents — principally banking lobbyists and some regulatory officials — have lost the stablecoin yield fight but may find new leverage in DeFi and ethics provisions.
If the markup occurs the week of May 11 as expected, the path narrows but remains viable. If it slips past Memorial Day, the Clarity Act joins the long list of crypto legislation that died waiting for the Senate.