The US CLARITY Act, a bill aimed at defining crypto regulation, is stalled in a four-way Senate Banking Committee deadlock as a narrow May window for progress rapidly closes.
The legislation is caught between crypto firms, banks, regulators and political factions, with disagreement centred on whether stablecoin issuers should be allowed to offer yield to users.
Senator Bernie Moreno warned the bill must reach a full Senate vote by May or risk being sidelined until after the 2026 midterm elections.
A proposed compromise would ban passive yield on stablecoins while allowing activity-based rewards, though major industry players including Coinbase and Stripe have not fully backed the framework.
“If the bill does not reach the full Senate floor by May, digital asset legislation may not receive serious consideration again for years,”
Said Senator Bernie Moreno.
The bill still faces multiple hurdles including committee approval, a 60-vote Senate threshold, reconciliation with other versions and presidential sign-off, leaving little room for delay.
If passed, the legislation would formalise the SEC and CFTC jurisdictional split and potentially unlock institutional crypto investment, while failure could prolong regulatory uncertainty and delay broader market adoption.