Crypto Regulation Stalled in Senate as Banks Rally to Block 2026 Rules

Clarity Act Stuck in Senate as Clock Ticks on 2026 Crypto Regulation

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Time constraints and competing priorities hinder the passage of the Digital Asset Market Clarity Act.

Stablecoin yield disputes stall progress, with Senator Thom Tillis seeking a compromise.

Aggressive banking industry lobbying contributes to delays in the bill’s committee progress.

The future of the Digital Asset Market Clarity Act is now critical. Because the Senate Banking Committee won’t review it until May, and lawmakers will soon break for the August recess, the crypto industry is carefully calculating how much time remains to pass this important legislation.

Ji Kim, head of the Crypto Council for Innovation, estimates the Senate has around 13 weeks to consider the bill. However, that’s likely an overestimate. After accounting for scheduled breaks, the Senate realistically has only 9 to 10 weeks to work on it. This timeframe is further limited by other urgent matters, such as renewing the FISA law, approving the budget to begin the reconciliation process, and funding the Department of Homeland Security, all of which require immediate attention.

Senator Kim stated they have roughly 13 weeks remaining in the Senate to pass legislation, emphasizing the need to send the bill to President Trump before Congress focuses on midterm election campaigns.

The problem is, the bill has not even made it out of the Senate Banking Committee.

Stablecoin yield dispute continues to hold up progress

The Clarity Act has been stuck in committee since January. Lawmakers had to cancel a planned vote after losing support from important industry groups. While a vote was expected in April, Senator Thom Tillis requested more time to work out a deal regarding how stablecoins offer interest and rewards to banks, effectively ruling out an April vote.

Senator Tillis said last week that he prioritizes careful consideration and clear communication. He wants to make sure everyone is heard and understands the reasoning behind decisions, avoiding any rushed choices.

Senator Tillis’ request for more time to consider legislation comes as banks are heavily lobbying him. The North Carolina Bankers Association, in particular, has recently contacted his office, expressing concerns that certain provisions could allow stablecoins to offer rewards similar to interest, potentially harming traditional banks.

Discussions about how much interest stablecoins should earn – a topic originally left unclear in last year’s GENIUS Act – have significantly delayed progress on the Clarity Act since the beginning of the year.

Patrick Witt, who advised on cryptocurrency during the Trump administration, was blunt in his assessment. He recently posted on X (formerly Twitter) that further lobbying efforts by banks on this issue seem driven solely by greed or a lack of understanding, and urged people to accept that and move forward.

Meanwhile, the North Carolina Blockchain Initiative encouraged Senator Tillis to advance the bill for consideration, dismissing concerns from banks and emphasizing that the legislation is vital for maintaining North Carolina’s position as a leading financial center.

Industry ramps up pressure

Over 120 cryptocurrency companies, like Coinbase, Ripple, and Circle, have jointly urged Senate leaders to quickly schedule a review of a new bill. The Blockchain Association and the Crypto Council for Innovation led this effort. Additionally, the Digital Chamber separately sent a letter on April 20th, also requesting the bill advance to the formal review stage.

In a conversation with Crypto In America, Kim stated she believes things will move forward rapidly once they reach an agreement on stablecoin yields. She acknowledged that rewards are a key concern, but added that other outstanding issues are also being worked on simultaneously.

However, several important issues are still being worked out. These include rules for decentralized finance (DeFi), ethical guidelines to prevent government officials from personally benefiting from crypto, and filling empty positions at the SEC and CFTC. These are all still under discussion.

Lummis pledges May markup at Bitcoin 2026

Senator Cynthia Lummis, a Republican from Wyoming who leads the Senate subcommittee on digital assets, recently shared the most specific timeframe to date regarding potential cryptocurrency legislation. She revealed this timeline while speaking at the Bitcoin 2026 Conference in Las Vegas on Monday.

Senator Lummis announced to a crowd of over 40,000 people that the Clarity Act will be debated and finalized in May.

Senator Lummis stated that they’re very close to finalizing language regarding stablecoins and market structure, with about 99% of the details worked out. She cautioned that if Congress doesn’t pass crypto regulations this year, it could be until at least 2030 before another attempt is made, as a new Congress would have to begin the entire legislative process over.

The Senate is taking a week off starting Thursday, meaning the Banking Committee won’t be able to review the bill until the week of May 11th, if they can resolve disagreements about stablecoin yields, decentralized finance, and ethical concerns beforehand. With another break for Memorial Day on May 21st, time is very limited.

Galaxy Digital puts the odds at 50-50

Market analysts are paying close attention to the possibility of the Clarity Act being passed. According to a recent report from Alex Thorn, head of research at Galaxy Digital, there’s about a 50/50 chance – and potentially less – that the Act will become law in 2026.

Thorn explained that the difficulty isn’t about one particular problem, but rather the large amount of questions that need to be answered quickly, one after another.

Galaxy explained that the bill needs to clear five more steps before it can become law: it must go through the Senate Banking Committee for revisions, pass a Senate vote with at least 60 votes, be reconciled with a similar bill already approved by the Senate Agriculture Committee, be combined with the Clarity Act that passed the House in July 2025, and finally, be signed by the President.

Currently, Polymarket predicts there’s about a 47% chance the Clarity Act will become law this year, a significant drop from 82% in February. Kalshi offers a more pessimistic outlook, estimating only a 15% chance of it passing by July and around 37% by August.

At an event in Washington on April 22nd, Senator Bernie Moreno (R-OH) said the bill needs to be passed by Congress before the end of May, or it might be abandoned for good.

Kevin Warsh confirmation adds to Senate Banking Committee’s plate

The Senate Banking Committee is first focused on Kevin Warsh’s nomination for Federal Reserve Chair before it can turn to the Clarity Act.

Senator Tillis removed his hold on Kevin Warsh’s confirmation on Sunday after the Justice Department closed its investigation into Federal Reserve Chair Jerome Powell regarding potential overspending on building renovations. The Senate committee will now vote on Warsh’s nomination on Wednesday at 10 a.m. Eastern time.

The vote is happening the same day Federal Reserve Chair Powell announces their next move on interest rates. This decision follows a two-day meeting of the FOMC, which started today. Most experts predict the Fed will keep rates unchanged, remaining between 3.5% and 3.75% for the third time in a row. This expectation is due to ongoing concerns about inflation and the instability caused by increasing energy prices related to the conflict in the Middle East.

Jerome Powell’s time as Federal Reserve Chair ends on May 15th. If Kevin Warsh is approved by the committee on Wednesday, the full Senate could vote soon after, potentially allowing him to lead the Fed’s meeting in June. Warsh, a former Fed governor during the 2008 financial crisis, is generally considered supportive of cryptocurrency.

What comes next

There’s still a chance for the bill to pass, though the timeline is tight. If the Senate Banking Committee can finalize its review by mid-May, a full Senate vote could happen in June or July. This would then allow time to work out any differences with the House version before sending it to the President before Congress’s summer break in August.

Each day of delay shortens the available time to address the situation. The Senate is currently busy with other important issues, including discussions about military action regarding Iran, funding for the Department of Homeland Security, and confirming presidential nominees. Democrats have also raised concerns about empty positions at the SEC and CFTC, which they might use as bargaining chips during debates.

In July 2025, the House of Representatives passed the Clarity Act with strong support from both parties, by a vote of 294 to 134. However, the Senate hasn’t voted on the bill yet.

If this bill passes, it would be the second major cryptocurrency law signed under the Trump administration, building on the previous GENIUS Act for stablecoins. However, industry experts believe that if the bill fails to pass, it could be until 2030 before another opportunity arises.

2026-04-28 06:00