The Clear Act remains undecided, and stablecoin yields have become the biggest point of controversy.

Article by: Blockchain Knight

As the core legislation to establish a comprehensive federal digital asset regulatory framework in the United States, the CLARITY Act is likely to be postponed to May for review.

What was originally expected to see breakthroughs in late April has now become a test of whether Congress can finalize crypto regulation rules during an election year.

The bill is intended to resolve disputes over regulatory jurisdiction in the crypto space, clarify the respective regulatory responsibilities of the SEC and the CFTC. It was passed by the House of Representatives in July 2025 with a strong bipartisan vote of 294 to 134, but has since fallen into a months-long deadlock in the Senate over controversy surrounding stablecoin yield rates.

The root of the dispute lies in a legacy loophole in the Genius Act. The Genius Act, which took effect in July 2025, established a 1:1 fiat reserve framework for stablecoins, but did not specify whether third parties or affiliated platforms may provide yield-based rewards to stablecoin holders.

This ambiguity has become a bottleneck to advancing the clear-and-defined act. At its core, legislators must decide whether stablecoins are only to be used as non-yield payment tools, or whether they should be allowed to build yield-generating financial products around them.

And data from the White House has inflamed the divide between both sides. On April 8, the CEA report showed that a comprehensive ban on stablecoin yields would only increase bank loans by $2.1 billion (an increase of 0.02%), but would result in an $800 million net welfare loss for consumers. Moreover, of the new loans, only $0.5 billion would flow to community banks, directly weakening the banking industry’s core argument against stablecoin yields.

But the American Bankers Association is still jointly lobbying in force with regional groups, calling for a comprehensive ban on stablecoin-related yields (including those from issuers, affiliates, and third parties). They worry it would divert bank deposits, and they have even run advertising and organized a joint letter signed by 3,200 bankers, claiming that permissive terms could lead to $6.6 trillion in deposit transfers.

The crypto industry firmly opposes the ban, arguing that it would entrench the traditional banks’ monopoly on profits. Institutions such as Paradigm, a crypto investment firm, accuse the banking sector of deliberately dragging its feet to kill the bill.

The stalemate between the two sides is identical to the deadlock at the February White House summit, and no compromise has been reached.

The Senate’s tight schedule further exacerbates uncertainty about whether the bill will pass. Under pressure from the banking industry, senators are pushing the Senate Banking Committee to delay consideration. From May, the Senate will also be dealing with state affairs work schedules and holiday adjournments; after August, the legislative focus will shift to midterm elections, leaving very little time to review the bill and coordinate a House version.

At present, the decentralized prediction platform Polymarket shows that the probability the bill will pass this year has fallen from 82% in February to 48%.

The future of the bill depends on two things: first, whether a compromise can be reached on stablecoin yield rates—closing the so-called “loophole” for banks while preserving room for development for the crypto industry; second, whether enough review time can be secured ahead of the election season.

If the controversy continues, the bill may become an unfinished task of the election year. If consensus can be reached quickly, even if the review is delayed until May, there is still a possibility of passage.

At present, the escalation of bank lobbying, the White House’s rebuttal, and the Senate’s silence all point to one key factor: the finalization of the stablecoin yield provisions will determine the ultimate fate of this crucial piece of crypto legislation.