The Digital Asset Market Clarity Act (H.R. 3633), the most ambitious U.S. crypto market-structure bill in a decade, has stalled in a four-way Senate deadlock with 18 working weeks left on the congressional calendar. The bill passed the House 294–134 on July 17, 2025, cleared the Senate Agricultur...
"If CLARITY doesn't pass committee by the end of April, odds of passage in 2026 become extremely low." — Alex Thorn, Head of Firmwide Research, Galaxy Digital
The Digital Asset Market Clarity Act (H.R. 3633), the most ambitious U.S. crypto market-structure bill in a decade, has stalled in a four-way Senate deadlock with 18 working weeks left on the congressional calendar. The bill passed the House 294–134 on July 17, 2025, cleared the Senate Agriculture Committee 12–11 on January 29, 2026, and has not advanced since. Over 100 proposed amendments forced Senate Banking Committee Chair Tim Scott to postpone the January 14 markup rather than risk a failed vote.
The central dispute is stablecoin yield: whether crypto platforms may pay interest-like returns on stablecoin holdings. A March 20 compromise by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) bans passive yield but permits activity-based rewards. Coinbase and Stripe have privately objected to portions of the draft text. Meanwhile, the banking lobby spent $56.7 million on federal lobbying in 2025, while crypto-aligned PAC Fairshake has amassed $193 million for 2026 midterm campaigns. The bill's passage now depends on whether the Banking Committee can schedule and complete markup before the Senate leaves for Memorial Day recess on May 21.
The CLARITY Act creates a statutory division of authority between the SEC and CFTC for digital assets. Core provisions include:
The bill cleared the House with bipartisan support (294–134) in July 2025, attracting 22 cosponsors (14 Republican, 7 Democrat, plus the sponsor). The Senate Agriculture Committee advanced its version on a party-line 12–11 vote on January 29, 2026.
The Senate Banking Committee has not scheduled a markup date. Chair Tim Scott postponed the January 14 session after 137 proposed amendments were filed. As of April 9, 2026, the committee has not reconvened on the bill. The Senate returns from Easter recess on April 13, and Senator Bill Hagerty has stated the Banking Committee could advance the bill during the work period beginning that week.
Four groups hold effective veto power over the bill's final text, creating a deadlock where no single faction commands enough votes to override the others.
1. Senate and Industry Backers
Senators Hagerty, Cynthia Lummis, and the crypto industry seek a federal framework that shifts primary oversight to the CFTC. Coinbase Chief Legal Officer Paul Grewal said on April 1 that legislators were "close to a deal" on the remaining provisions. Senator Hagerty stated: "There's still a lot more work to do, but none of the outstanding issues are insurmountable."
2. Banking Lobby
The American Bankers Association and allied groups oppose stablecoin yield provisions, arguing they would trigger deposit migration from the banking system. Banks contend that allowing platforms to pay ~3.5% on USDC balances — as Coinbase currently does — blurs the line with traditional deposits and threatens trillions in bank lending capacity. The banking lobby spent $56.7 million on federal lobbying in 2025 and filed a key amendment to prohibit all yield on stablecoin holdings, even when the platform is not the issuer.
3. Stablecoin Issuers and DeFi Platforms
Major issuers including Circle (USDC) and exchanges like Coinbase demand regulatory certainty that preserves the ability to offer reward programs. Their position: overly restrictive yield language undermines U.S. competitiveness and pushes activity offshore. Coinbase withdrew support for earlier draft versions that included a broad yield prohibition.
4. Structural Skeptics and Investor Protection Advocates
Figures including former CFTC Chair Timothy Massad and advocacy group Better Markets argue the bill "would carve crypto out of core investor protections." Their concern is that shifting oversight from the SEC to the CFTC reduces enforcement resources and consumer safeguards. The CFTC's enforcement budget is roughly one-fifth of the SEC's.
The stablecoin yield question is the bill's central obstacle. The dispute centers on whether platforms can pay interest-like returns on stablecoin holdings and, if so, under what conditions.
The Tillis-Alsobrooks Compromise (March 20, 2026):
Senators Tillis and Alsobrooks reached an agreement in principle that draws a line between two categories:
The distinction matters because passive yield competes directly with bank savings accounts, while activity-based rewards more closely resemble loyalty or cashback programs.
Industry reaction was mixed. Draft text was circulated to banking and crypto lobbyists on March 23–24 for review. According to reporting from FinTech Weekly, both Coinbase and Stripe privately objected to specific language in the draft, while banking groups signaled cautious acceptance of the framework but sought tighter definitions of "activity-based."
The White House, through Treasury Secretary Scott Bessent and crypto council director Patrick Witt, has been actively mediating the bank-crypto dispute. A self-imposed March 1 deadline for resolution passed without a public agreement.
While Congress remains deadlocked, federal regulators have moved independently to fill the vacuum.
On March 11, 2026, the SEC and CFTC signed a Memorandum of Understanding establishing a framework for coordination on crypto oversight. Six days later, on March 17, the agencies issued a joint interpretation clarifying how federal securities laws apply to crypto assets. The guidance introduced a five-category token taxonomy: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.
SEC Chair Paul Atkins and CFTC Chair Michael Selig (confirmed December 18, 2025) launched "Project Crypto," an initiative aimed at drawing bright jurisdictional lines between the two agencies. The joint guidance addresses many of the same questions the CLARITY Act seeks to resolve through legislation — a parallel track that both supports and potentially undermines the urgency of congressional action.
If the CLARITY Act fails, according to CryptoSlate, "firms remain in a patchwork regime shaped by enforcement and agency guidance, while banks retain tighter control over dollar-based financial activity." The SEC-CFTC guidance provides interim clarity but lacks the permanence and legal weight of statute. Executive branch interpretations can be reversed by future administrations.
The CLARITY Act has become a proxy battle between two of Washington's most well-funded lobbying operations.
Crypto Industry:
Banking Industry:
The spending asymmetry favors crypto by roughly 3:1 in direct political expenditure. However, banking interests retain structural advantages: incumbency, established regulatory relationships, and deposit-based economic leverage over lawmakers in every congressional district.
The bill faces a five-step process before becoming law:
Scenario A: April Markup, May Floor Vote
The Banking Committee completes markup during the April 13–May 2 work period. The bill reaches the Senate floor in early May. With Memorial Day recess starting May 21, floor time is limited to approximately three weeks. Polymarket assigns ~61% probability to passage under this scenario.
Scenario B: Delayed Markup, Summer Push
Banking Committee delays past April. Summer legislative calendar competes with appropriations, judicial confirmations, and midterm campaign activity. Galaxy Digital's Alex Thorn has warned odds become "extremely low" without April committee action. Senator Bernie Moreno has stated that missing the May window "risks pushing comprehensive crypto legislation off the calendar until after the 2026 midterms — and potentially beyond."
Scenario C: Legislative Failure
The bill does not clear the Senate in 2026. Regulation reverts to the SEC-CFTC joint guidance framework, enforcement actions, and state-level patchwork. Kalshi assigns approximately 48% probability to this outcome.
The CLARITY Act has direct implications for how economic value flows through the crypto ecosystem. From an economic-value-first perspective, the bill's passage or failure affects three areas:
Compliance Cost Distribution. AML and KYC protocols currently consume 34% of crypto firms' compliance budgets. Compliance staffing rose 41% in 2025. Under a unified CFTC framework, registration and compliance costs could consolidate — potentially reducing redundant state-by-state licensing (currently averaging $120,000 per state for U.S. exchanges). Failure to pass leaves firms navigating overlapping SEC, CFTC, FinCEN, and state requirements simultaneously. A 2025 European Commission SME Impact Assessment found 68% of crypto startups with under 10 staff report AML compliance costs as unaffordable.
Stablecoin Revenue Flows. Stablecoin issuers generate revenue from reserves invested in Treasury bills and similar instruments. Coinbase currently pays ~3.5% on USDC holdings. A yield ban redirects that value to issuers and their banking partners rather than end users. A yield permission redistributes value toward platform users but increases competition with bank deposits. The White House's own study estimated the stablecoin yield ban would add approximately 0.02% to bank lending margins — a figure that suggests the banking lobby's deposit-flight argument may be overstated relative to the systemic risk claimed.
Jurisdictional Clarity and Capital Formation. Without statutory clarity, SEC enforcement actions — totaling over 30 crypto-related cases and $2.6 billion in penalties in 2025 — function as de facto regulation. The CFTC's digital asset cases comprised nearly half its enforcement docket, generating $17 billion in monetary relief. A clear jurisdictional framework reduces regulatory risk premiums and theoretically lowers the cost of capital for compliant digital asset projects.
The CLARITY Act sits at the intersection of jurisdictional turf, deposit economics, political spending, and midterm-election calculus. The bill represents the most concrete attempt to resolve a decade of regulatory ambiguity over digital assets in the United States. Its outcome will determine whether the crypto industry operates under a statutory framework designed for digital assets or continues under an enforcement-driven regime built on securities laws from the 1930s.
The next three weeks will likely determine the bill's fate. If the Senate Banking Committee advances the bill before May, a path to the president's desk exists — narrow, but open. If not, the regulatory status quo persists: agency guidance, enforcement actions, and state-level fragmentation. For an industry that generates approximately $13.7 billion in annual on-chain revenue against $55–71 billion in subsidies, the cost of continued regulatory ambiguity compounds with each passing quarter.