CLARITY Act Timeline Narrows as April Senate Deadline Looms

TLDR

• Senate Banking Committee approval before April’s end is critical, or the CLARITY Act’s 2026 passage probability plummets
• Prediction markets show declining confidence: Polymarket at 56% (down 9 points), Kalshi at merely 30% by June
• Central controversy revolves around permitting stablecoin issuers to distribute yield to holders
• Coinbase withdrew endorsement in January, asserting a flawed bill is worse than no legislation
• Gnosis co-founder cautions the legislation might consolidate crypto control among centralized entities

Time is running short for the CLARITY Act, America’s proposed cryptocurrency market structure legislation. According to Galaxy Research head Alex Thorn, the bill requires Senate floor consideration by early May to maintain viable 2026 passage prospects. This necessitates Senate Banking Committee clearance before April concludes.

Senate Majority Leader John Thune has publicly acknowledged the April timeline appears unrealistic. Current Senate priorities center on the SAVE America Act, relegating the CLARITY Act to secondary status on the legislative calendar.

According to Thorn, each day of postponement reduces available time for floor consideration. Without committee approval during April, he characterized 2026 passage prospects as “extremely low.”

Prediction platforms mirror this growing skepticism. Polymarket indicates the legislation’s 2026 enactment probability has declined 9 percentage points to 56%. Kalshi demonstrates greater pessimism, calculating 30% likelihood before June and merely 7% before May.

Stablecoin Yield Remains Central Flashpoint

The most contentious issue involves stablecoin yield distribution. The controversy focuses on whether stablecoin issuers should possess authority to pass interest earnings to users.

Representative French Hill stated that prohibiting stablecoin yield represents a non-negotiable requirement for Senate advancement. Traditional banking institutions contend that interest-bearing stablecoins would divert deposits from regulated financial entities.

Cryptocurrency firms counter that reward-bearing stablecoins enhance payment utility. Coinbase retracted support during January. CEO Brian Armstrong argued the current draft undermines decentralized finance, prohibits stablecoin yield, and restricts tokenized real-world assets. “We’d rather have no bill than a bad bill,” he declared.

Senator Angela Alsobrooks suggested compromise from both factions may prove necessary. White House crypto adviser and Coinbase CLO Paul Grewal also condemned banks for impeding progress.

DeFi and Regulatory Turf Wars Still Unresolved

Thorn suggested the stablecoin controversy may not represent the final hurdle. He identified outstanding questions regarding decentralized finance regulation, developer liability protections, and SEC-CFTC jurisdictional boundaries.

Attorney Jake Chervinsky noted that banking institutions also express concern about stablecoin liquidity migrating toward DeFi platforms, beyond just yield distribution issues.

Gnosis co-founder Dr. Friederike Ernst cautioned the bill’s present framework threatens to channel all cryptocurrency activity through licensed intermediaries. She expressed concern this could consolidate crypto infrastructure control among a limited group of major institutions.

Ernst acknowledged the legislation includes positive elements, such as safeguarding peer-to-peer transactions and self-custody rights, plus defining SEC and CFTC regulatory boundaries.

Senator Bernie Moreno expressed continued optimism for April passage and presidential signature. Thorn indicated that schedule now appears increasingly unrealistic.