The fate of the CLARITY Act, a significant bill aiming to shape the regulatory landscape for digital assets in the United States, appears increasingly uncertain as critical deadlines loom in Congress. Current legislative activity suggests that if the Senate Banking Committee fails to clear the bill by the end of April, hopes for its passage by 2026 may diminish dramatically.
Senate Priorities And Committee Hurdles
Senate Majority Leader John Thune, who oversees the chamber’s legislative agenda, acknowledged the unlikelihood of meeting the April timeline. Legislative focus in the Senate has shifted toward the SAVE America Act, leaving the CLARITY Act on the back burner and reducing its immediate chances of progression.
Alex Thorn, head of research at Galaxy Digital, outlined that each day without committee movement further reduces available time for the bill’s floor debate. He emphasized that committee approval before the end of April is essential to keep the window open for 2026 enactment, cautioning that delays will likely erode its chances significantly.
Prediction Markets Reflect Doubt
On-chain prediction platforms reveal waning confidence in the bill’s near-term prospects. On Polymarket, the likelihood of the CLARITY Act passing by 2026 has dropped to 56%, showing a 9-point decline in recent days. On Kalshi, sentiment is even more pessimistic, with only a 30% perceived chance by June and just 7% before May.
The CLARITY Act serves as a legislative framework aiming to define rules for crypto markets, address stablecoins, and clarify agency oversight in the rapidly evolving digital asset sector.
Stablecoin Yield Distribution At The Center
A key stumbling block is the issue of yield distribution by stablecoin issuers. Policy disputes focus on whether companies issuing stablecoins can legally pass on interest earnings to holders. Banks have argued against this, expressing concern that it could lead to liquidity migration away from traditional institutions. Representative French Hill underlined that a ban on stablecoin yield is a non-negotiable point for Senate approval.
Coinbase, one of the largest digital asset platforms in the US, pulled its backing for the bill in January. CEO Brian Armstrong described the draft as harmful for decentralized finance, banning stablecoin yield, and blocking tokenized real-world assets. Armstrong conveyed, “We’d rather have no bill than a bad bill.”
Some voices in the Senate have noted the need for compromise, while White House crypto adviser and Coinbase chief legal officer Paul Grewal has accused banking interests of stalling meaningful regulatory progress.
A number of crypto legal experts and entrepreneurs warn that restricting stablecoin yield may push liquidity into decentralized platforms, posing separate regulatory challenges.
Dr. Friederike Ernst, Gnosis co-founder, warned that current language in the bill could channel most crypto activity through licensed companies, increasing concentration of market power. However, she also highlighted provisions that protect peer-to-peer transactions, enable self-custody, and clarify regulatory domains between the SEC and CFTC as positive aspects.
Senator Bernie Moreno continues to express optimism for April passage and a possible presidential signature, but industry analysts are increasingly skeptical that the necessary steps can be completed this spring.
