CLARITY Act Regulatory Game: Scenario Analysis of BTC, ETH, SOL, and XRP During the Critical Window in 2026

When the fate of a bill is enough to rewrite the entire industry’s regulatory framework, market attention will no longer be confined to Washington’s legislative agenda. Since April 15, 2026, when the Senate removed the CLARITY Act (Digital Asset Market Clarity Act) from that week’s schedule, discussions around this crypto market structure legislation have evolved from “whether it will pass” to “when it will pass” and “what the two possible outcomes mean.” As of April 20, 2026, the probability of the CLARITY Act passing in 2026 on Polymarket is 58%, a significant drop from the high of 82% at the start of the year. Senator Cynthia Lummis issued a clear warning: if the bill fails to pass in this window, the next opportunity won’t come until at least 2030.

Overview of the legislative process: a long game from House to Senate

The CLARITY Act was passed by the House in July 2025 with a bipartisan vote of 294 to 134. The bill’s core goal is to end years-long jurisdictional disputes between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), clearly categorizing digital assets into three types: digital commodities, investment contract assets, and licensed payment stablecoins.

However, after entering the Senate, it faced continuous delays. The markup scheduled for January 15, 2026, by the Senate Banking Committee was postponed indefinitely. By mid-April 2026, the bill was again removed from the Senate’s daily agenda, with Chairman Tim Scott citing three unresolved issues: stablecoin reward provisions, decentralized finance (DeFi) clauses, and coordination of positions within the Republican members of the committee.

Senator Bernie Moreno explicitly stated that the bill must reach the full Senate by May; otherwise, it will be shelved for the remainder of 2026 due to midterm election politics. Galaxy Research estimates that only about 18 effective working weeks remain before the mid-October recess.

The latest notable development comes from the White House. On April 19, 2026, the White House publicly demanded that banks abandon their obstruction of the stablecoin yield provisions, directly calling the obstructing banking institutions “greedy.” This political signal injects new momentum into the legislative process from the executive level.

JPMorgan released a research report on April 17, suggesting that legislative negotiations are nearing completion, with contentious issues reduced from over ten to 2-3 core questions. Senate staff indicated that the draft is “very close” to reaching consensus.

In contrast, TD Cowen’s Washington research team warned as early as January 2026 that midterm elections could delay crypto market structure legislation until 2027. Additionally, Ray Dalio predicted that Democrats might retake control of the House in the November 2026 midterms, potentially deprioritizing crypto legislation.

Key milestones in the CLARITY Act legislative process

May 2024: FIT 21 (H.R. 4763) passes the House, but does not receive a vote in the 118th Congress Senate;

July 2025: CLARITY Act (H.R. 3633) passes the House with 294 votes to 134;

July 2025: GENIUS Act signed into law, prohibiting stablecoin issuers from paying interest directly to holders;

January 12, 2026: Senate Banking Committee Chair Tim Scott releases the CLARITY Act amendment text;

January 15, 2026: Original markup postponed indefinitely;

March 22, 2026: Tillis and Alsobrooks reach a compromise on stablecoin yield provisions;

April 8, 2026: White House Economic Advisory Council releases an economic analysis report on the stablecoin yield ban;

April 10, 2026: Coinbase CEO Brian Armstrong publicly endorses the CLARITY Act;

April 15, 2026: Bill removed from the Senate weekly schedule;

April 19, 2026: White House publicly urges banks to abandon obstruction, entering a decisive phase in stablecoin yield negotiations.

Data and structural analysis: a multi-layered game of a bill

Differential impact of core provisions

The CLARITY Act significantly affects different types of digital assets, depending on how tokens are classified under the bill.

The core mechanism of the bill is the division of jurisdiction between the SEC and CFTC. The CFTC gains exclusive jurisdiction over digital commodities, including anti-fraud enforcement and oversight of exchanges and brokers; the SEC retains regulatory authority over investment contract assets during issuance. According to the current draft, a blockchain system can be recognized as a “digital commodity” under CFTC jurisdiction if it can prove that, over the past 12 months, the combined voting rights held by the issuer and related parties do not exceed 20%.

On token classification, the draft includes an important clause: digital assets that have become ETF underlying assets and are listed on a national securities exchange as of January 1, 2026, will be recognized as “non-affiliated assets,” exempt from additional disclosure obligations. Under this clause, assets like BTC, ETH, XRP, SOL, LTC, HBAR, DOGE, and LINK will receive the same regulatory treatment from the effective date of the bill. This means XRP and SOL could gain the long-held “digital commodity” designation previously enjoyed only by BTC and ETH.

Economic calculations of the stablecoin yield ban

The core obstacle delaying the CLARITY bill for nearly a year is the prohibition on stablecoin passive yields. The current Tillis-Alsobrooks compromise hinges on splitting “passive yields” from “activity rewards”: banning interest payments solely for holding stablecoins, while explicitly allowing activity incentives and rewards linked to payment behavior and platform use.

The banking industry’s main concern is deposit outflow risk. Organizations like the American Bankers Association cite Treasury Department research indicating that if stablecoins can offer unregulated yields, U.S. banks could face up to $6.6 trillion in deposit losses.

However, the White House Economic Advisory Council’s report on April 8 offers a different conclusion: banning stablecoin passive yields would only increase total U.S. bank loans by about $2.1 billion (roughly 0.02% of total), while costing consumers about $800 million annually in lost returns, with a cost-benefit ratio of 6.6. Even in the worst-case scenario where the stablecoin market doubles in size, the increase in loans would only reach $531 billion (about 4.4% of total). This analysis weakens the arguments of banking opponents at the policy level.

Political arithmetic of midterm elections

The November 2026 midterm elections impose a strict legislative deadline for the CLARITY bill. If Democrats regain control of the House or Senate, the Trump administration’s supportive policies toward crypto could be reversed. Even if the bill passes the Senate Banking Committee markup, it still needs to meet the 60-vote threshold in the full Senate, coordinate with the Senate Agriculture Committee version and the House version, and finally be signed by the President.

Public opinion analysis: tug-of-war among multiple forces

Support camp

Senator Cynthia Lummis is one of the most steadfast advocates of the CLARITY bill. In early April, she repeatedly warned that “this is our last chance to pass the bill, at least until 2030,” emphasizing “we cannot afford to jeopardize America’s financial future.”

Treasury Secretary Scott Bessent published a column on April 9, framing the CLARITY bill as a matter of national security, noting that unclear regulation has pushed crypto development toward regions with clearer rules like Abu Dhabi and Singapore.

Ripple CEO Brad Garlinghouse adjusted his expected timeline for the bill’s passage from April to late May but remains optimistic. Coinbase CEO Brian Armstrong, after publicly opposing the bill in January, officially endorsed the CLARITY Act again on April 10.

Opposition and doubts

Bank lobbying is the biggest obstacle to the stablecoin yield provisions. The North Carolina Bankers Association has urged member banks to call Senator Tillis’s office directly, demanding a complete ban on stablecoin yield payments.

Within the crypto industry, disagreements also exist. A16z Crypto managing partner Chris Dixon, after the postponement of a January hearing, said, “Crypto builders need clear rules of the road,” implying some industry participants prefer accepting flawed legislation over no legislation. Cardano founder Charles Hoskinson explicitly criticized the CLARITY bill on April 19, stating, “A bad bill is worse than no bill at all.”

Former SEC chief accountant Lynn Turner warned ahead of the January Senate hearing that the current draft is “seriously lacking” in investor protection and could set the stage for “another FTX-style fraud.”

Regulatory agencies’ preparedness

SEC and CFTC have preemptively completed memoranda of understanding required by the CLARITY bill and issued joint interpretive notices distinguishing “investment contract assets” from “digital commodities.” SEC Chair Paul Atkins publicly stated at a roundtable on April 16 that the SEC and CFTC “are operationally ready, and once Congress passes the bill, implementation can begin immediately.”

Differential benefits for various tokens

The following analysis is based on current draft provisions, examining the potential impact on major crypto assets under the scenario of bill passage.

Bitcoin (BTC)

As of April 20, 2026, BTC is priced at $74,246.3, with a market cap of $1.49 trillion, accounting for 56.37% of the market.

BTC is least affected by the CLARITY framework for three reasons: its high degree of decentralization, nearly undisputed classification as a digital commodity; its large market cap and liquidity, which buffer short-term policy uncertainties; and its narrative as “digital gold,” which does not rely on any single regulatory path.

The core benefit of the bill for BTC is not direct price movement but rather an indirect institutional safeguard—providing clearer legal foundations for BTC ETF issuers, reducing compliance costs, and eliminating legal uncertainties for institutional investors, potentially accelerating traditional capital inflows. Matt Hougan, CIO of Bitwise, called the CLARITY bill “the Punxsutawney Phil of the crypto winter” (meaning it could serve as an early signal for market direction), and warned that failure might prolong the current downturn.

Ethereum (ETH)

As of April 20, 2026, ETH is priced at $2,270.34, with a market cap of $275.69 billion, representing 10.41% of the market.

ETH faces higher opportunities and risks under the CLARITY bill than BTC. On the opportunity side, the bill’s standards for “mature blockchain” digital commodity recognition (voting power concentration not exceeding 20% over 12 months) provide a clear quantifiable path for ETH. Additionally, the bill offers explicit protections for developers and imposes adapted risk management and compliance standards on centralized intermediaries interacting with DeFi, which could benefit ETH’s DeFi ecosystem in the long term.

On the risk side, the regulation of DeFi remains unsettled. Coinbase withdrew support in January partly due to concerns over DeFi provisions. If the final bill imposes overly strict compliance requirements on DeFi, it could constrain permissionless, self-custodied protocols on Ethereum. Moreover, the stablecoin yield ban will directly impact stablecoin applications on Ethereum—though activity rewards are permitted, the boundary between “passive” and “activity” remains interpretive, and regulators reserve the right to define rules within 12 months of enactment.

Solana (SOL)

As of April 20, 2026, SOL is priced at $83.92, with a market cap of $48.26 billion, accounting for 1.98% of the market.

SOL is one of the assets with the greatest potential benefit elasticity under the CLARITY bill. The key driver is the “non-affiliated asset” clause—this grants SOL, which already has ETF recognition, the same regulatory treatment as BTC and ETH.

This means two key changes: first, SOL moves from the current regulatory gray area into a clear “digital commodity” legal framework; second, the exemption from additional disclosure obligations significantly reduces compliance burdens around the SOL ecosystem. Market behavior shows that the bill’s passage could trigger a revaluation of SOL by institutional investors—during the delay in December 2025, SOL-related funds saw a net inflow of $48.5 million, indicating market expectations of differentiated benefits. If the bill passes and clarifies SOL’s commodity status, its gains could be among the most significant among the four major tokens.

Ripple (XRP)

As of April 20, 2026, XRP is priced at $1.4, with a market cap of $85.95 billion, representing 5.30% of the market.

XRP’s situation under the CLARITY bill is similar to but more complex than SOL’s. Like SOL, XRP would be covered by the “non-affiliated asset” clause, gaining the same regulatory treatment as BTC and ETH once the bill is effective, fundamentally ending the long-standing legal dispute with the SEC and providing XRP with much-needed regulatory certainty.

More complex is XRP’s close association with the stablecoin market. Ripple’s RLUSD stablecoin has grown to a $1.3 billion market cap and is driving record trading volume on the XRP Ledger. The final scope of the stablecoin yield provisions in the CLARITY bill will directly impact RLUSD’s competitiveness—more room for activity rewards means a stronger advantage for RLUSD. Conversely, if strict bans favored by banks are adopted, RLUSD and Ripple’s broader payment ecosystem could face constraints.

It is worth noting that, similar to SOL, during the December 2025 delay of the CLARITY bill, XRP funds experienced a net inflow of $62.9 million. This indicates that market expectations of XRP benefiting from regulatory clarity are somewhat priced in but not fully reflected in the current price.

Multi-scenario evolution: passage or failure

The following scenarios are constructed based on current available information and market reactions to similar past events (such as spot Bitcoin ETF approvals). It is important to emphasize: these are speculative scenarios, not predictions. Actual market reactions depend on multiple factors and may deviate from these outlines.

Scenario 1: The CLARITY bill passes within the May window

Conditions include: Senate Banking Committee completes markup in late April, the full Senate votes before mid-May (meeting the 60-vote threshold), coordination with the Agriculture Committee and House versions, and presidential signing.

Short-term market reaction (1-4 weeks after passage): Regulatory certainty premiums may be reflected across the digital asset market, but token performance will vary significantly. SOL and XRP are expected to show the highest volatility due to their “non-affiliated asset” status being confirmed—a structural benefit not fully priced in before. ETH follows, as final DeFi provisions still have interpretive space; BTC remains relatively stable, as its regulatory positioning has been largely digested. Data from Gate.io shows that as of April 20, all four major tokens declined between 1.73% and 2.66% within 24 hours, with the market in a wait-and-see mode, and directional moves likely triggered by further developments.

Medium-term structural impact (3-12 months post-passage): SEC and CFTC enter an 18-month joint rulemaking cycle. Institutional investors accelerate compliance-driven market entry, with JPMorgan previously expecting institutional inflows to concentrate in late 2026. Stablecoin activity reward frameworks become clearer, and platforms like Coinbase and Circle, heavily reliant on stablecoins, complete product adjustments. The rulemaking process’s initiation means actual regulatory changes will occur gradually rather than abruptly.

Long-term industry impact (1-3 years): The U.S. could establish a first-mover advantage in global crypto regulation, attracting projects that previously migrated to jurisdictions like Abu Dhabi and Singapore back home. Regulatory arbitrage opportunities diminish, and rising compliance costs accelerate industry consolidation, favoring leading players with strong compliance capabilities.

Scenario 2: The CLARITY bill fails to pass

Conditions include: failure to reach a compromise on stablecoin yield provisions, or Democratic senators’ delaying tactics are satisfied, or the markup scheduled for April 25 is not completed, causing the bill to miss the legislative window in 2026.

Short-term market reaction (delay/failure confirmed, 1-4 weeks): The market may experience a risk-off correction driven by policy disappointment. During the December 2025 delay, U.S. digital asset funds saw weekly outflows of $952 million, mainly from BTC and ETH products. If the bill ultimately fails, the correction could be larger than the previous delay. XRP and SOL could see larger declines than BTC and ETH, as the anticipated positive valuation from the bill would need to be partially or fully unwound.

Mid-term alternative path (2026-2027): Without passage, SEC and CFTC might revert to enforcement-led regulation, but the memoranda of understanding and interpretive notices already issued provide some coordination basis. The industry faces a core dilemma: without a legislative framework, rules will be defined case-by-case through litigation, a process that could take years and be highly uncertain. Political shifts after the midterms will further increase unpredictability.

Long-term structural risks (3-5 years): If delayed until 2030, the U.S. risks falling behind jurisdictions with clear frameworks, losing its competitive edge in global crypto regulation. Innovation may migrate offshore, and U.S. investors could participate via offshore platforms, creating a regulatory vacuum that could foster incidents like FTX. The industry might face a “legislative stagnation—enforcement dominance—industry outflow” negative cycle.

Conclusion

The fate of the CLARITY bill is not just about the survival of a legislative text but about shaping the future operational rules of the crypto industry for years to come. As of April 20, 2026, negotiations are nearing the finish line—disputes have been reduced to 2-3 issues, and White House political pressure is shifting the game. But the time window is extremely tight. For major assets like BTC, ETH, SOL, and XRP, the bill’s passage or failure will lead to significant structural divergence, with SOL and XRP having the greatest expected elasticity due to their “non-affiliated asset” status. Regardless of the final outcome, the process of establishing a regulatory framework is irreversible. The CLARITY Act is a key milestone in this process—but missing this window means waiting at least four more years. Market choices are never passive; they are probabilistic judgments made under incomplete information. The 58% passing probability on Polymarket is a dynamic figure, with each update reflecting shifts in the Washington negotiation landscape.