Countdown! The powder keg on Capitol Hill is about to explode, as the crypto regulation "life-and-death bill" is being dragged into a deadlock by bank lobbying. Miss this month, and you may have to wait another two years!

The U.S. Senate Banking Committee was originally scheduled to review a piece of legislation called the “Clear Act” concerning the structure of the crypto market by the end of April. However, this timeline is now being pushed into May due to intense lobbying from banking industry trade organizations. Committee Chair Tim Scott recently stated that the review might not be completed in April and highlighted three unresolved issues: stablecoin yield terms, DeFi-related provisions, and ensuring support from all Republican senators within the committee.

According to procedure, to hold a vote in the week of April 27, the review notice must be issued by April 25 at the latest. However, on April 22, the committee’s attention was already occupied by another important hearing. Some senators explicitly warned that if the bill does not reach a full Senate vote before May, the midterm election cycle will make any significant legislation politically nearly impossible, and digital asset regulation may have to wait until the next Congress.

The core controversy of this bill centers on whether to allow stablecoin issuers to pay yields to holders. After more than two months of negotiations, bipartisan senators reached a principled compromise in late March: banning purely “passive holding” yields but allowing rewards based on on-chain activities such as payments and transfers. The crypto industry generally accepted this proposal.

However, the banking sector’s attitude was ambiguous after initial contact, until the White House Council of Economic Advisers released a report. The report pointed out that a complete ban on stablecoin yields would only increase bank total loans by about $2.1 billion, accounting for 0.02% of total outstanding loans. It estimated that the net cost to consumers from the ban would be around $800 million. The implicit message was that concerns about deposit outflows from banks were exaggerated by data.

Following the report’s release, opposition from the banking industry surged. Local banking associations began organizing members to pressure key senators, and lobbying efforts expanded to include more committee members. As a result, the release of the compromise text was delayed, and the lead negotiator proposed holding a face-to-face meeting with industry experts to resolve disagreements, which would likely further delay progress.

Stablecoin yields are not the only obstacle. Democratic senators cited recent frequent DeFi security incidents, calling for stricter anti-money laundering and sanctions compliance provisions in the bill. Additionally, disagreements exist over “ethics clauses” restricting government officials from profiting from crypto assets during their tenure, due to sensitive political implications.

Before becoming law, the “Clear Act” must pass five hurdles: committee approval, full Senate vote, coordination with the Agriculture Committee version, coordination with the House version already passed, and presidential signing. Each step takes time, and the political clock is ticking. As the first comprehensive crypto market structure legislation in the U.S., its main goal is to clarify the regulatory boundaries between the SEC and CFTC, providing clear frameworks for token classification, exchange registration, and more.

Market observers previously expected the bill to complete review in April, but this has now been delayed until late May. After this week’s key hearings, whether the committee issues a review notice will determine if the legislation accelerates or slips into the busier May agenda. If delays continue, the remaining time for the current Congress to complete all legislative steps will be very limited.

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