In July 2025, the U.S. House of Representatives passed the Digital Asset Market Clarity Act with a strong bipartisan majority of 294-134. For the crypto industry, the vote felt like a turning point. After years of “regulation by enforcement,” after countless lawsuits between the SEC and crypto firms, after billions in compliance costs, the United States finally appeared to have the political will to write actual rules.
That was nine months ago. The bill is still not law.
In April 2026, the CLARITY Act sits in the Senate Banking Committee, blocked by a single, unresolved fight that has nothing to do with the bill’s central provisions. The dispute is not about whether crypto should be regulated as a security or a commodity. It is not about whether the SEC or CFTC should have jurisdiction. It is about whether crypto exchanges should be allowed to pay rewards to users for holding stablecoins.
That is the entire fight. And it has stalled what would be the most important piece of crypto legislation in U.S. history.
The bill, briefly
The CLARITY Act creates a regulatory taxonomy that the U.S. has been arguing about since Bitcoin’s earliest days. The 278-page Senate draft, released January 12, 2026, divides digital assets into three categories with distinct regulatory homes.
Digital commodities — including most major cryptocurrencies once their networks are sufficiently decentralized — fall under CFTC jurisdiction. Investment contract assets — tokens still controlled by their issuers, sold for capital raising — remain under SEC oversight. Permitted payment stablecoins get a hybrid framework split between Treasury, federal banking regulators, and the CFTC.
The structure ends a regulatory turf war that defined the entire Biden-era SEC under Gary Gensler. It eliminates the “regulation by enforcement” approach that crypto companies have spent years complaining about. It creates a clear on-ramp for both new token launches and existing protocols to comply with U.S. law.
If passed, the CLARITY Act would be the second major crypto bill to become law, joining the GENIUS Act, which passed in mid-2025 and established the first U.S. federal framework for stablecoins.
The CFTC, the SEC, and the Treasury would have 12 months from passage to write the implementing regulations. Industry consensus is that this could meaningfully accelerate institutional capital deployment in U.S. crypto markets, potentially reversing flows that have moved offshore to the EU’s MiCA framework over the past year.
The stablecoin yield fight, explained
The fight that has stalled the bill comes down to a specific provision and the lobbying war around it.
The GENIUS Act, passed in mid-2025, prohibited stablecoin issuers — companies like Circle, Tether, and Paxos — from paying interest to holders of their stablecoins. The intent was clear: stablecoins should function as payment instruments, not as bank deposits. If issuers paid interest, stablecoins would compete directly with bank savings accounts and money market funds.
But the GENIUS Act did not explicitly prevent other intermediaries — crypto exchanges, wallets, and platforms that distribute stablecoins — from offering rewards to users. Coinbase, in particular, built a business around this loophole. The exchange offers users rewards on USDC holdings and reportedly generates approximately 20% of its total revenue from this business line.
The American Bankers Association argues this is a deliberate evasion of congressional intent. ABA President Rob Nichols has called for closing the “loophole” to protect the deposit base of traditional banks. Senate Republican Thom Tillis has been negotiating directly with bankers since January, and the negotiations have repeatedly delayed the Banking Committee markup hearing.
The crypto industry, led by Coinbase, has pushed back hard. The company’s Fairshake PAC raised $202 million for the 2026 election cycle, much of it directed at pro-crypto candidates. In April 2026, more than 100 crypto firms — including Coinbase and Ripple — sent a coordinated letter to the Senate Banking Committee demanding the markup proceed.
The compromise being negotiated would allow rewards tied to user activity (transactions, payments, engagement) but prohibit rewards on static stablecoin holdings that resemble bank deposits. Whether this satisfies the bankers, the crypto industry, and the senators trying to thread the needle remains unclear.
The calendar problem
Even if the stablecoin yield fight is resolved tomorrow, the CLARITY Act faces a brutal legislative calendar.
The Senate Banking Committee markup must happen first. Then the bill must move to the Senate floor, where it competes with every other piece of legislation for limited debate time. Both the Banking Committee version and the Senate Agriculture Committee version (which cleared on a narrow 12-11 vote in January 2026) must be reconciled into a single bill. Then the Senate must pass it.
Then the reconciled Senate bill must be matched against the House CLARITY Act. Differences must be negotiated. The House must vote again on the final text. The President must sign it.
In normal legislative cycles, this process takes months. The Senate effectively goes into recess in August and remains in election mode until November’s midterm elections. After that, the lame-duck session is typically reserved for must-pass legislation like spending bills. By the time the new Congress is sworn in in January 2027, the political composition of the Senate may be entirely different.
Crypto investment firm Galaxy estimated in April 2026 that the odds of CLARITY being signed into law in 2026 are “roughly 50-50, and possibly lower.” The uncertainty does not come from any single issue. It comes from the sheer number of unresolved questions that must be settled in sequence under severe time pressure.
If the bill does not pass in 2026, the next realistic window is 2030 — assuming a future Congress prioritizes the issue.
The Trump factor
Layered on top of the stablecoin fight is a political dynamic that did not exist in previous crypto legislative battles: the President of the United States now has direct, documented financial interests in the outcome.
Senate Democrats have raised concerns about the decentralized finance sector and demanded Democratic appointments to vacant SEC and CFTC positions before they will support the bill. The most contentious of their requests, however, is a demand to ban senior government officials from profiting on personal crypto business ties — a demand pointed directly at Trump’s family.
The Trump family’s World Liberty Financial (WLFI) has issued a stablecoin called USD1, currently with approximately $2 billion in circulation. The family receives 75% of net proceeds from WLFI token sales. The CLARITY Act would, in effect, regulate the same stablecoin sector that includes Trump-affiliated products. Democratic senators argue this represents a clear conflict of interest and have refused to support the bill without ethics provisions addressing it.
Republicans have not agreed to those provisions. Trump has publicly threatened he will not sign any approved bills until Congress sends him a voter-ID package — a procedural threat that further complicates timing.
The result is a legislative tangle that combines genuine policy disagreement, lobbyist pressure from both bankers and crypto exchanges, and political theater around the President’s personal financial interests. Any one of these issues alone could be resolved. All three together, on a tight calendar, may not be.
What’s at stake
If the CLARITY Act passes in 2026, the U.S. crypto industry gets the regulatory clarity it has demanded for nearly a decade. Compliance becomes legible. Institutional capital flows accelerate. The flight of crypto projects to MiCA-regulated EU jurisdictions reverses. The SEC and CFTC stop fighting each other and start writing rules.
If it doesn’t pass, the alternative is another year of regulation by enforcement, continued legal ambiguity around major DeFi protocols and exchanges, and ongoing capital migration to friendlier jurisdictions. The crypto market is currently pricing in eventual passage, but the discount is real. Bitcoin’s stability around $75,000-$80,000 reflects a market that expects clarity but has not fully priced it in.
The most realistic near-term outcome is partial movement. The Banking Committee may finally hold a markup in May, advance some version of the bill, and force the larger Senate to debate it before August recess. Whether that’s enough to get to final passage before the calendar runs out depends on factors that nobody currently controls.
For now, the CLARITY Act remains the bill that crypto cannot kill and Washington cannot pass. It has bipartisan support. It has industry consensus. It has presidential backing. And it has been blocked, for nine months, by a fight over whether Coinbase users can earn 4% on their USDC.
That is the state of U.S. crypto regulation in April 2026. Make of it what you will.
This is news analysis based on congressional records, reporting by CoinDesk, DL News, and the Latham & Watkins US Crypto Policy Tracker. It is not legal advice. Crypto regulation is changing rapidly and outcomes are highly uncertain.
