The Senate Banking Committee heads into another markup session this Tuesday as lawmakers continue wrestling with the long-awaited crypto market-structure bill, the CLARITY Act — but progress so far has been incremental, and no breakthrough appears imminent.
Why April matters
Insiders say April will be pivotal. With the month fast approaching, sources warn that if the CLARITY Act does not clear key hurdles by the end of April, its chances of passage this year will fall sharply. Alex Thorn of Galaxy Digital Research says time is running out, warning the odds of approval “will become extremely low” if the bill doesn’t move forward this month.
What’s on the table
A Monday report from Crypto In America (Eleanor Terret) notes that Senate Banking Committee Chair Tim Scott is slated to open the session with a fireside chat, but the markup date hinges on finalizing the bill’s language — most importantly the fight over stablecoin yield.
Stablecoin yield: the sticking point
Negotiations have increasingly centered on how the law would handle rewards tied to stablecoin balances. One emerging compromise would ban interest on idle stablecoin holdings while still allowing transaction-based rewards — a formulation that aims to protect traditional bank deposits from being siphoned off by high-yield crypto products.
Cody Carbone, CEO of the Digital Chamber, expressed cautious optimism, saying negotiators “are getting closer and closer to a deal” and that a resolution could come within a week. But thornier issues remain: Senators Thom Tillis and Angela Alsobrooks have surfaced as important gatekeepers, attuned to banking-sector concerns that crypto firms offering interest-like yields could trigger deposit flight from traditional banks. Tillis is reportedly still engaging stakeholders on a compromise (though he won’t attend the summit this week), while Alsobrooks is expected to address the yield debate in a Wednesday speech.
Broader hurdles still ahead
Even if negotiators settle the stablecoin-rewards question, Alex Thorn warns that other contentious topics could slow the bill’s trajectory. Remaining flashpoints include how the CLARITY Act would treat decentralized finance (DeFi), investor protections, the Securities and Exchange Commission’s authority, and broader ethical issues. The committee’s January draft was pitched as bipartisan but drew limited direct input from Democrats, underscoring the partisan frictions that could complicate final passage.
Bottom line
Negotiators have narrowed in on a potential compromise over stablecoin rewards, and a quick resolution could unlock progress on DeFi and token classification. But with a packed agenda and high political stakes, the CLARITY Act’s path remains uncertain — and April may be the month that decides whether it advances this year.
Credits: Featured image from OpenArt; chart from TradingView.com.
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