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The US Senate’s efforts to pass the CLARITY Act, one of the broadest crypto market structure bills, have increasingly been clouded in doubts as political pressure and policy divergence continue to push the bill past April. What was expected to pass quickly is now in danger of being forced into May, with limited time left to legislate before the elections.
The CLARITY Act attempts to establish regulatory obligations in all digital asset markets that include trading platforms, token issuers, and spot markets. Although the House of Representatives, in July 2025, voted its version with a 294-134 bipartisan vote, the Senate remains divided over stablecoin yield.
Senator Thom Tillis is reportedly lobbying to stop the bill, which increases the risk of important legislative deadlines. As per Polymarket data, the probability of the CLARITY Act passing in 2026 has fallen drastically to 48% from 82% in February, reflecting uncertainty.
The centre of the debate is whether crypto platforms should be allowed to provide yield-like incentives on stablecoin balances. The previous GENIUS Act (July 2025) required the reserve to be the same as that of stablecoins but did not regulate third-party yield offerings.
Data from the White House Council of Economic Advisers (CEA) challenges the banking sector’s concerns. The report discovered that the prohibition of stablecoin yield would only raise bank lending by $2.1 billion or 0.02%, but lead to a loss to the consumer of around $800 million. Also, small banks would experience incremental lending of just $500 million, which suggests a small systemic benefit.
However, conventional financial institutions are resolute. The American Bankers Association (ABA) remains aggressive in lobbying with warnings that stablecoins, which are yield-bearing, can disrupt the deposit flows and weaken the old lending model.
According to Paradigm’s Alexander Grieve, they just want to kill CLARITY. And if they can drag it out to the deadline, they will.” Similarly, White House Crypto Council executive Patrick Witt described the pressure as stemming from “greed or misunderstanding.”
Also Read: Clarity Act Stablecoin Yield Debate Delayed as US Lawmakers Remain Divided on Crypto Policy
Time is becoming a risk factor. The Senate calendar consists of several recesses, May 4-8, May 25-29, and a more extended recess beginning from August 10, so there is less time to enact such complicated legislation.
The urgency was emphasized by Galaxy Research’s Alex Thorn, who said, “The delay in the banking committee increases the risk that CLARITY Act will not pass in 2026. Every week squeezes the time needed to go through all the stages.”
The CLARITY Act stands at a crossroads between regulatory clarity and political stalemate. Although evidence suggests limited economic risk from stablecoin yield, established stakes in traditional finance and a more restrictive legislative timetable may slow the bill. Crypto industry’s regulatory future in the United States will be determined by the outcome.
