Key Takeaways
- • The CLARITY Act (H.R. 3633), which passed the House in July 2025 with strong bipartisan support (294-134), remains in Senate negotiations with an expected Banking Committee markup hearing targeted for late April 2026, though timing has slipped to potentially mid-May.
- • Three critical unresolved issues block Senate passage: stablecoin yield language, decentralized finance (DeFi) provisions, and securing unanimous Republican votes on the Banking Committee, according to Chairman Tim Scott (R-S.C.).
- • Banking groups have pushed back on proposed stablecoin yield restrictions, while the crypto industry has responded positively to a compromise framework unveiled by senators; however, banks' concerns about the final language remain unresolved.
- • The legislative calendar is tightening significantly—CLARITY must compete for floor time against Iran military authorization, DHS funding disputes, and nomination backlogs, with odds of 2026 enactment estimated at roughly 50-50 or lower by Galaxy Research.
- • Additional unresolved issues include treatment of noncustodial software developers under the Blockchain Regulatory Certainty Act, ethics provisions regarding government officials' crypto holdings, and SEC-related concerns that could further delay passage.
Summary
The CLARITY Act (Digital Asset Market Clarity Act of 2025) has advanced to the endgame of the legislative process but faces mounting time pressures and substantive disagreements that threaten 2026 enactment. The bill passed the House with decisive bipartisan backing (294-134 votes) in July 2025 and has been subject to intensive Senate negotiations since January 2026. The Senate Banking, Housing, and Urban Affairs Committee is expected to announce a markup hearing imminently, likely for the final week of April, though reporting from Punchbowl News indicates that Senator Thom Tillis (R-N.C.), a key committee negotiator, has called for delaying the markup until May.
Three substantive issues remain unresolved at the committee stage, per Chairman Tim Scott. The most contentious involves stablecoin yield restrictions—senators unveiled a compromise proposal on stablecoin rewards that has generated cautiously positive reactions from the crypto industry, but major U.S. banks have remained largely tight-lipped while simultaneously pushing back on the proposal's restrictions on yield-bearing stablecoins. DeFi provisions and securing all Republican committee votes represent the second and third critical obstacles. The banking industry's reluctance to endorse the compromise suggests potential leverage to demand further modifications before committee passage.
Beyond the Banking Committee hurdle, the legislative path remains extraordinarily complex. CLARITY must clear a 60-vote Senate floor vote, be reconciled with the Agriculture Committee's competing version, be reconciled with the House-passed bill, and be signed by the President. Multiple other issues continue to present potential obstacles, including the treatment of noncustodial software developers under the Blockchain Regulatory Certainty Act, ethics provisions related to government officials' cryptocurrency holdings, and unresolved SEC-related concerns that could resurface during later legislative stages.
The compressed legislative calendar poses the most significant structural risk. Timing competition from the Iran military authorization debate, unresolved Department of Homeland Security funding disputes, and a substantial backlog of presidential nominations severely limits available Senate floor time. Galaxy Research estimates that if the Banking Committee markup slips past mid-May, the probability of enactment in 2026 will decline sharply. Senator Cynthia Lummis (R-Wyoming) has warned that failure to pass market structure legislation in 2026 could delay such efforts until 2030 or beyond. Current probability assessments for 2026 enactment range from 50-50 at best, with some analysts viewing the odds as lower, suggesting the legislative window remains genuinely uncertain despite the bill's earlier House success and demonstrated bipartisan support.
Three substantive issues remain unresolved at the committee stage, per Chairman Tim Scott. The most contentious involves stablecoin yield restrictions—senators unveiled a compromise proposal on stablecoin rewards that has generated cautiously positive reactions from the crypto industry, but major U.S. banks have remained largely tight-lipped while simultaneously pushing back on the proposal's restrictions on yield-bearing stablecoins. DeFi provisions and securing all Republican committee votes represent the second and third critical obstacles. The banking industry's reluctance to endorse the compromise suggests potential leverage to demand further modifications before committee passage.
Beyond the Banking Committee hurdle, the legislative path remains extraordinarily complex. CLARITY must clear a 60-vote Senate floor vote, be reconciled with the Agriculture Committee's competing version, be reconciled with the House-passed bill, and be signed by the President. Multiple other issues continue to present potential obstacles, including the treatment of noncustodial software developers under the Blockchain Regulatory Certainty Act, ethics provisions related to government officials' cryptocurrency holdings, and unresolved SEC-related concerns that could resurface during later legislative stages.
The compressed legislative calendar poses the most significant structural risk. Timing competition from the Iran military authorization debate, unresolved Department of Homeland Security funding disputes, and a substantial backlog of presidential nominations severely limits available Senate floor time. Galaxy Research estimates that if the Banking Committee markup slips past mid-May, the probability of enactment in 2026 will decline sharply. Senator Cynthia Lummis (R-Wyoming) has warned that failure to pass market structure legislation in 2026 could delay such efforts until 2030 or beyond. Current probability assessments for 2026 enactment range from 50-50 at best, with some analysts viewing the odds as lower, suggesting the legislative window remains genuinely uncertain despite the bill's earlier House success and demonstrated bipartisan support.
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