- The CLARITY Act is stuck due to a bank vs crypto conflict over stablecoin yields.
- Political delays, industry disagreements, and a tight calendar are slowing progress despite earlier approvals.
- Rising tensions with Iran are shifting focus away from crypto regulation efforts.
The CLARITY Act, also known as the crypto market structure bill, which passed the House with a strong 294-134 vote back in July 2025, is still stuck in the Senate Banking Committee with no markup date confirmed. It was even cleared by the Senate Agriculture Committee in January 2026, yet here we are in April 2026, and the bill is still stuck.
So what is actually holding it back? Here are key reasons why the CLARITY Act bill stalled.
1. The Stablecoin Yield War – Banks vs. Crypto
This is the single biggest reason the bill is frozen. The fight is over whether crypto platforms like Coinbase can pay users interest-like rewards for simply holding stablecoins. Banks say this creates “deposit flight,” money moving out of traditional bank accounts into digital ones, which threatens their ability to lend.
Banking associations argue that if crypto exchanges and stablecoin issuers can pay a yield similar to interest, it could lead to deposit flight from traditional banks. The crypto industry calls that argument overblown and says stablecoin revenue is existential for their business model.
Both sides have dug in hard, and every time a compromise gets close, one side finds something new to object to.
2. Brian Armstrong’s X Post Collapsed the January Hearing
The Senate Banking Committee was poised to advance the bill in January 2026. That all changed when Coinbase CEO Brian Armstrong withdrew support for the revised text, and within hours, committee leadership delayed the markup with no new date announced.
That single move set the entire bill back by three months.
3. The Legislative Calendar Is Running Out
Even if every policy disagreement were resolved tomorrow, the CLARITY Act still faces a long process. It must pass Senate committees, win 60 votes, align with the House version, and get presidential approval, steps that take time and strong support.
But time is running out. Lawmakers return from the Memorial Day recess in early June, but focus quickly shifts to the 2026 United States midterm elections set for November 3, 2026. If the Senate Banking Committee fails to act before April ends, the bill could be pushed to 2027 or even dropped entirely if political power shifts after the elections.
4. U.S.-Iran Conflict Is Making It Worse
Rising tensions between the U.S. and Iran are forcing lawmakers to focus on national security, military decisions, and foreign policy debates. This shift is taking away time, attention, and political energy from financial reforms like crypto regulation.
As a result, discussions around the CLARITY Act are getting delayed, with urgent global issues clearly taking priority over industry-focused bills.
The CLARITY Act is not stuck because it’s a bad idea. It is stuck because many problems are happening at the same time, bank pressure, fights within the crypto industry, concerns from Democrats, a long legal process, and very little time left.
For the bill to pass, all these issues must be solved quickly. If that doesn’t happen in the next few weeks, the future of crypto rules in the U.S. could face serious delays.
Related: Bipartisan PACE Act Seeks Fed Rail Access for Crypto Firms
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