April 13, 2026: The US Senate ends its two-week Easter recess and resumes full session. With this key date, the Digital Asset Market Clarity Act (CLARITY Act) enters the final stretch of the Senate legislative process.
The Senate Banking Committee plans to hold a markup session in the latter half of April to review, amend, and vote on the bill. If the bill fails to clear committee review in April, Galaxy Research head Alex Thorn has warned that the chances of passing the legislation in 2026 will become "extremely low." Procedurally, before the bill is officially signed into law, it must go through five steps: article-by-article review by the Banking Committee, secure 60 votes in the full Senate, reconcile with the Agriculture Committee version, align with the House version passed in July 2025, and finally reach the President’s desk for signature—all within less than two months.
Why Late April Is the Last Window for the CLARITY Act
On Washington’s legislative calendar, time is the strictest constraint. After the Senate reconvenes, the Banking Committee’s markup window is targeted for the last two weeks of April, with the schedule controlled by Committee Chair Tim Scott. As of now, Scott has not announced an official markup date, leaving the bill’s advancement path uncertain.
Two critical calendar events make this window irreversible. First, Congress will recess for Memorial Day starting May 21. If the bill fails to make key progress in the Senate before then, the legislative process will fall into the political cycle of the midterm elections. Second, with the November 2026 midterms approaching, Senator Bernie Moreno has warned that if the bill isn’t advanced by May, review could be delayed until after the election cycle. US academic Sun Yuanzhao points out that if the bill isn’t passed before Congress’s summer recess (by August), "it’s likely dead on arrival."
Senator Cynthia Lummis has issued an even more urgent warning: if the bill doesn’t pass this year, the legislative process could be pushed beyond 2030. This reflects how the election cycle structurally compresses the legislative window—once midterms are over, the balance of power in Congress may shift, and the political priority of crypto legislation could be reordered.
How the Yield Clause Debate Is Reshaping the Bill’s Dynamics
The biggest stumbling block for the CLARITY Act in the Senate is the ongoing dispute over stablecoin yield payment mechanisms. The banking sector fears that allowing stablecoin issuers or third parties to offer "passive yield" (i.e., simply holding USDC or similar stablecoins and earning returns) will siphon deposits from traditional banks and undermine their core deposit and lending business. The Independent Community Bankers of America have warned that small banks could face up to $1.3 trillion in deposit outflows.
The crypto industry takes a sharply different stance. Platforms like Coinbase argue that restricting stablecoin yields is essentially bank protectionism. Stablecoin-related income accounts for about 20% of Coinbase’s total revenue, making the yield clause a direct factor in its business model. In January 2026, Coinbase CEO Brian Armstrong publicly stated he’d "rather have no bill than a bad bill," actively blocking the committee’s markup process at the time.
This deadlock saw a pivotal shift in April. On April 10, Armstrong formally announced support for the CLARITY Act, reversing his previous opposition. One factor driving this change was the White House Council of Economic Advisers’ research report released April 8. The report concluded that a blanket ban on passive yields offers limited actual protection for bank deposit stability—a political determination that paved the way for compromise.
The emerging Tillis-Alsobrooks compromise framework now anchors the yield clause debate. Its core logic: crypto platforms are prohibited from paying interest on mere stablecoin balances, but incentives and rewards tied to payment activity and platform usage are allowed. This aims to balance banks’ concerns over deposit flight with the crypto industry’s need to sustain its business model.
White House Economic Report: Latest Assessment of Yield Ban Effects
The White House Council of Economic Advisers (CEA) report further supports the compromise direction. It estimates that banning stablecoin yields would increase US bank lending by only about $2.1 billion—a mere 0.02%—with most of the growth flowing to large banks, not community lenders. The report states: "The conditions for seeking positive social welfare effects by banning yields are fundamentally unrealistic. In short, a yield ban does little to protect bank lending but deprives consumers of competitive returns for holding stablecoins."
This finding strongly rebuts banking sector lobbying. In 2025, large banks spent about $56.7 million lobbying against stablecoin yield provisions. Yet CEA’s calculations show that even under its most aggressive assumptions (stablecoin market grows sixfold), community bank lending would rise only 6.7%. The American Bankers Association responded by claiming flaws in the White House report and maintaining that stablecoin yields pose risks to community banks, but overall, bipartisan compromise has significantly reduced legislative resistance.
Structural Changes the CLARITY Act Will Bring to Crypto Asset Regulation
The CLARITY Act passed the House in July 2025 with a strong 294-134 vote, including 78 Democratic supporters—bipartisan backing far higher than previous similar bills. That same day, the GENIUS Act was signed into law by the President, establishing a federal regulatory framework for dollar-backed payment stablecoins.
The bill’s core structure has three elements: First, most spot crypto trading is classified as commodities under CFTC oversight, ending the longstanding jurisdictional conflict between the SEC and CFTC. Second, it sets clear reserve, disclosure, and compliance rules for stablecoin issuers. Third, it defines regulatory boundaries for digital assets, reducing uncertainty driven by enforcement. Former White House crypto czar David Sacks says the CLARITY Act provides "rules of the road" for all digital assets.
For the industry, this regulatory clarity is expected to reduce compliance uncertainty and encourage institutional capital to enter the crypto market. Treasury Secretary Scott Bessent urged Congress to send the bill to the President’s desk, calling it a "critical step to bring the future of finance back to America." For stablecoin issuers, the final wording of the CLARITY Act’s yield clause will directly impact how their business models are valued.
How Midterm Elections Compress the Political Window for Crypto Legislation
The 2026 midterms are the biggest political variable affecting the CLARITY Act’s prospects. The current Senate split is 53 Republicans, 47 Democrats (including 2 independents). Major bills typically require 60 votes to overcome procedural hurdles, meaning even with full Republican support, 7 to 10 Democratic votes are needed.
As midterms approach, Congress’s agenda will shift increasingly toward campaigning. By October, lawmakers will focus more on elections than legislation. If Democrats regain control of the House and Senate in November, the bill’s passage could become significantly more difficult. Secretary Bessent has previously said it’s vital to pass the bill and send it to the President before the US spring (late March to late June). This timeline aligns closely with the current April window—late spring is the last point at which legislative momentum can continue.
Structural Impact on the Crypto Industry If the Bill Passes
If passed, the CLARITY Act would mark a critical step toward regulatory certainty in the US crypto market, potentially attracting institutional capital but also introducing new compliance burdens. Internally, the impact will be mixed: retail investors face risks from changes to stablecoin interest models and restrictions on RWA investments, but gain protections for client fund segregation; institutions gain opportunities for compliant entry; project teams must bear different compliance costs based on "security" or "commodity" classification.
For stablecoin issuers, the final wording of the CLARITY Act’s yield clause will directly affect their business models. Circle’s USDC circulation is nearing or exceeding $78 billion, and whether its reserve interest income can be partially passed on through activity-based incentives will determine USDC’s appeal to institutional and retail users. If the Tillis-Alsobrooks compromise is codified, Circle can maintain a rewards ecosystem based on USDC usage within a compliant framework. Conversely, if banks succeed in narrowing the definition of activity incentives at the final stage, issuers’ revenue structures will face direct compression.
From a broader perspective, the CLARITY Act also aims to reinforce the dollar’s position in digital finance through stablecoins. Regulatory clarity signals a new phase for the crypto market—rising compliance costs will accelerate industry shakeout, but traditional institutions entering the space will bring deeper capital foundations.
Summary
The CLARITY Act is now in the final window of the Senate legislative process. The late April Banking Committee markup is the decisive moment; missing this window means the 2026 legislative effort is likely doomed. The stablecoin yield clause is the bill’s central controversy, and the Tillis-Alsobrooks compromise—banning passive yields but allowing activity-based incentives—has become the foundation for bipartisan agreement. Political pressure from the midterms further compresses the legislative timeline, making late April’s decisions irreversible. If passed, the bill will establish a clear regulatory framework for the US crypto market, delineate SEC and CFTC jurisdiction, and have far-reaching effects on stablecoin issuance, exchange compliance, and institutional participation.
FAQ
Q: What stage is the CLARITY Act currently at in the legislative process?
A: The bill passed the House in July 2025 with a strong 294-134 vote and is now under review by the Senate Banking Committee, with markup sessions and votes planned for the latter half of April.
Q: Why is late April a critical window?
A: After the Senate reconvened on April 13, the Banking Committee’s markup window is set for the last two weeks of April. After the Memorial Day recess begins May 21, midterm elections will dominate Congress’s agenda, making further progress much harder.
Q: Why is the stablecoin yield clause such a focal point of controversy?
A: Banks fear that letting stablecoin holders earn yield will cause deposit outflows, with estimated risks up to $1.3 trillion; the crypto industry sees this as protectionism, arguing that restricting yields will weaken DeFi’s competitiveness.
Q: What is the content of the Tillis-Alsobrooks compromise framework?
A: The framework prohibits crypto platforms from paying interest on mere stablecoin balances, but allows incentives and rewards tied to payment activity and platform usage.
Q: How many Senate votes are needed to pass the bill?
A: Major bills typically require 60 votes to overcome procedural hurdles. The current Senate split is 53 Republicans and 47 Democrats (including 2 independents).
Q: What happens if the bill doesn’t pass in late April?
A: Legislation may be delayed until after the midterm elections. If the balance of power in Congress changes, the bill’s chances of passage could become even more difficult.
