Analysis: The Clarity Act Still Has a Chance of Passage, But Must Be Voted on by the Senate in July

On April 22, CoinDesk reported that the Clarity Act, which the U.S. crypto industry has high hopes for, is unlikely to advance in April. However, lobbyists tracking the bill’s progress and a congressional aide indicated that the Senate committee is expected to hold a hearing sometime in May. As long as it can secure a final vote in the Senate by July, this key market structure legislation still has a chance of ‘survival.’ A Senate aide mentioned that the bill might be delayed for several weeks to allow Republican Senator Thom Tillis to complete discussions with the banking sector regarding stablecoin yield issues, but it has not yet reached an irretrievable point. Negotiations surrounding the DeFi protection provisions have largely been finalized. The main obstacle for the crypto industry is the banking sector’s objections to stablecoin rewards—bank lobbyists are concerned that the stablecoin reward mechanism could resemble deposit yields, threatening their business model. After August, the Senate will enter midterm election mode, with only about twelve working days left before the elections, during which it must also address issues such as Department of Homeland Security funding, the Iran war, voter ID legislation, and Trump’s nomination of Kevin Warsh as Federal Reserve Chairman. If the bill is approved by the Senate Banking Committee, it will still need to be merged with the version from the Senate Agriculture Committee, then passed again by the House, and finally signed by Trump. Crypto investment firm Galaxy will release a research report this week, estimating that the probability of the Clarity Act being signed into law by 2026 is about 50-50, or even lower.