The CLARITY Act Is Closer Than Ever, and Running Out of Time to Prove It

Key Takeaways: 

• Brian Armstrong reversed Coinbase's months-long opposition on April 10, publicly endorsing the CLARITY Act and telling CNBC he sees a 90% chance of passage by end of April.
• The Senate Banking Committee markup is targeted for the second half of April, with lawmakers warning that missing that window effectively kills the bill until after the 2026 midterms.
• A White House economic report dismantled the banks' central deposit flight argument, clearing the way for a compromise on stablecoin yield that both sides can live with.

For years, the US crypto industry has operated without a legal rulebook. Companies have built products, raised capital, and listed tokens while regulators argued over jurisdiction in federal court. Today, as the Senate returns from its Easter recess, that could be about to change. The Digital Asset Market Clarity Act is entering what lawmakers themselves have described as its final realistic window for passage, and for the first time in months, the conditions for it to actually happen are in place.

Senator Cynthia Lummis, the bill’s most vocal champion in the Senate, summed up the moment in a recent post on X:

The last administration drove away the digital asset industry. It’s time to welcome them home with clear rules of the road.

Pass the Clarity Act.

— Senator Cynthia Lummis (@SenLummis) April 12, 2026

What the CLARITY Act Actually Does

Before getting into the current state of play, it helps to understand what the bill is actually trying to accomplish, because the details matter more than the headlines suggest.

Right now, the United States regulates crypto primarily through enforcement actions. The SEC sues a company, a court decides whether a token is a security, and the rest of the industry watches and tries to guess what the ruling means for them. There is no statute that tells exchanges, developers, or investors what is legal and what is not. That ambiguity has pushed firms overseas, and it has kept trillions of dollars in institutional capital on the sidelines because compliance teams cannot sign off on an asset class with no legal definition.

The CLARITY Act aims to end that. It draws a clear statutory line between the SEC and the CFTC. Mature tokens whose value derives from network usage, including Bitcoin, Ethereum, and likely XRP, would be classified as digital commodities regulated by the CFTC. Token offerings that function like investment contracts stay with the SEC. Exchanges and brokers get a clear registration path. Developers writing open-source code for non-custodial DeFi protocols receive safe harbors, meaning they cannot be prosecuted as unregistered brokers simply for publishing software. Projects can raise up to $50 million under a custom exemption as long as the underlying blockchain is on track to decentralize within roughly four years. The bill also explicitly bans a retail Federal Reserve CBDC. In short, it could turn out to be the complete regulatory framework the US has been missing.

The Fight That Nearly Killed It Twice

The bill cleared the House in July 2025 with a strong bipartisan vote of 294 to 134, and the Senate Agriculture Committee advanced its version in January 2026. But the Senate Banking Committee, chaired by Senator Tim Scott, has postponed its markup twice, and the reason both times comes down to issues related to stablecoin yield.

The core dispute is whether crypto exchanges should be allowed to pay users interest-like rewards for holding stablecoins. Banks fought this provision hard, arguing that yield-bearing stablecoins would pull deposits out of traditional banking accounts and undermine their lending capacity. The Independent Community Bankers of America claimed it would cause $1.3 trillion in lost deposits for small banks. Commercial banks spent an estimated $56.7 million lobbying on this single issue in 2025.

The crypto industry pushed back just as hard though. Stablecoin revenue is central to how major exchanges operate. Coinbase generated $1.35 billion from stablecoin-related revenue in 2025, roughly 20% of the company’s total. When CEO Brian Armstrong publicly stated in January that Coinbase could not support the bill as written, the Banking Committee's scheduled markup collapsed within hours. The same thing happened in March, when Coinbase again withheld its backing over unresolved stablecoin provisions. Two rounds of opposition from one company derailed the entire bill twice in three months.

The Compromise That Broke the Logjam

Things began to shift on April 8 when the White House Council of Economic Advisers released a report that quietly gutted the banks’ central argument. The CEA found that banning stablecoin yield would increase total US bank lending by just $2.1 billion, roughly 0.02% of all outstanding loans, while costing consumers approximately $800 million per year in lost returns. Treasury Secretary Scott Bessent followed up by publicly pressuring the Banking Committee to stop stalling, calling on it to send the bill to Trump’s desk. Days earlier, Bessent had written an op-ed in the Wall Street Journal calling for Congress to move ahead with the legislation.

The compromise text crafted by Senators Thom Tillis and Angela Alsobrooks reflects where negotiations landed. It bans direct passive yield on holding a stablecoin and anything economically equivalent to bank interest, but it allows activity-based rewards including cashback on transactions, loyalty bonuses, and platform engagement rewards. The SEC, CFTC, and Treasury would then have 12 months after enactment to write detailed rules on where exactly that line falls.

Critically, on April 10, Armstrong reversed course entirely. Responding directly to Bessent on X, he wrote that Coinbase agrees it is time to pass the Clarity Act, describing the current version as a strong bill after months of bipartisan negotiation. Armstrong also told CNBC he believed there was a 90% chance the bill would pass by the end of April, and that the Senate had been meeting daily to resolve remaining issues. Polymarket odds for the bill’s 2026 passage briefly spiked following those comments.

We agree. Thank you @SecScottBessent for saying it. It's time to pass the Clarity Act.

Grateful for all the bipartisan work among Senators and staff over the past several months to make this a strong bill. https://t.co/jHoZ1bfLVZ pic.twitter.com/YBKebDkq8B

— Brian Armstrong (@brian_armstrong) April 10, 2026

The Next Two Weeks Are All That Matter

The Senate is back in session as of today, April 13, and the Banking Committee markup is targeted for the second half of this month. Senator Hagerty confirmed the bill would head to committee during this work period. Senator Lummis confirmed the same timeline at the DC Blockchain Summit, stating plainly that the committee will get it done in April. Senator Bernie Moreno has been equally direct about the consequences of failure. If the bill does not pass the Banking Committee by the end of April and reach the Senate floor by May, midterm election season effectively pushes it off the calendar for the rest of 2026. After Memorial Day, senators are home campaigning, and by October the legislative calendar is gone.

There is also strong support from the White House and regulatory agencies. Former crypto czar David Sacks, SEC Chair Paul Atkins, and CFTC Chair Michael Selig have all publicly endorsed the bill and called for swift Senate action. Trump himself posted on Truth Social earlier this year accusing banks of holding the legislation hostage. The political pressure from multiple directions is unlike anything the bill has experienced since it cleared the House.

Beyond the stablecoin yield issue, several other points of contention remain. Democratic senators including Kirsten Gillibrand have pressed for stronger ethics provisions barring government officials and their families from profiting from crypto, language directed at Trump family holdings. DeFi provisions and tokenization treatment have also required ongoing negotiation. However, the mood among lawmakers and industry participants is more optimistic than at any point since the House vote last July.

What Is at Stake

JPMorgan analysts have described the CLARITY Act’s passage by midyear as a meaningful positive catalyst for digital assets, citing regulatory certainty, institutional scaling, and tokenization as the primary drivers. Politically, crypto PACs are loaded heading into the midterms. Fairshake is sitting on $193 million in cash, with top donors including Coinbase, Ripple, and a16z. These groups have made clear that how senators vote on this bill will directly affect whether they face funded opponents in November.

Peter Van Valkenburgh, executive director of Coin Center, framed the bill’s purpose precisely: the aim of passing the CLARITY Act is not simply to trust the current administration, but to bind the next one. Whatever statutory framework gets written into law now becomes permanent until Congress changes it again, making this week’s Senate calendar about far more than just the next market cycle.

The Clock Is Running and the Pieces Are in Place

The CLARITY Act has come close before and stumbled each time. What is different today is that the biggest obstacle, Coinbase’s opposition, is gone. The White House economic report destroyed the banks’ main argument. The compromise text is public. The Senate is back in session. And the clock is ticking loud enough that even the most cautious lawmakers know this is the window. Whether Chairman Tim Scott puts a markup date on the calendar in the next few days will tell the market most of what it needs to know about whether 2026 ends with the US finally having a crypto law, or another year of regulatory limbo.