Adrift, the US CLARITY Act… “If it slips past April, passage this year will be difficult”

A view has emerged that if the US crypto market structure bill—the CLARITY Act—fails to clear a key hurdle in the US Senate by next month, the likelihood of it passing this year will drop sharply.

According to Cointelegraph on the 14th (local time), Alex Thorn, head of research at Galaxy Digital, said on X that day, “If the CLARITY Act does not pass out of (the Senate) committee by the end of April this year, the chances of passage in 2026 fall dramatically.” Thorn added, “At the latest, the bill needs to reach the Senate floor in early May,” explaining that “the longer it takes, the odds of passage keep declining.”

At present, the CLARITY Act’s central sticking point is whether to allow stablecoin rewards such as interest payments. The US banking industry believes that if stablecoins offer interest-like rewards, bank deposits could flow out on a large scale. The crypto industry, by contrast, is pushing back, arguing that banning stablecoin rewards could become a regulation that stifles innovation. In this regard, Democratic US Senator Angela Alsobrooks recently stressed the need for negotiations, saying, “Both the crypto industry and the banking sector will have to accept a compromise that involves some level of dissatisfaction.”

Thorn noted that even if disagreements over interest payments are resolved, new obstacles could emerge. Specifically, he said issues such as DeFi regulation, developer protections, and inter-agency clashes over supervisory authority could rise as new flashpoints.

The Senate calendar is also a variable. This follows after US Senator John Thune raised the possibility of prioritizing the ‘SAVE America Act,’ which tightens voter registration requirements, over the CLARITY Act. Some observers also say discussions on the CLARITY Act could be pushed back until after next month.

The possibility of a protracted legislative timeline has also been raised. US investment bank (IB) TD Cowen projected that if Democrats delay a vote until ahead of the midterm elections scheduled for November this year, passage of the CLARITY Act could be pushed back to 2027, and actual implementation could be delayed until 2029.