Crypto’s great hope in Senate’s Clarity Act still has a path to survive tight calendar

The crypto Clarity Act is facing a tight deadline as it struggles to make its way through the U.S. Senate. With April appearing to be a lost cause, hopes are now pinned on a Senate committee hearing in May to keep the critical market structure legislation alive. Lobbyists and a lawmaker aide closely following the bill’s progress believe that a final Senate vote could be possible by July if all goes according to plan.

One of the major hurdles the crypto industry is facing is the opposition from the banking sector regarding stablecoin rewards. Republican Senator Thom Tillis is currently in discussions with bankers over their concerns about stablecoin yield, which is causing a potential delay in the bill’s progress. However, negotiations over decentralized finance (DeFi) protections have been resolved, clearing the path for a committee approval.

The legislative calendar for the year is running out of room, with the Senate expected to be in election mode from August until the November congressional midterms. There are several pressing matters on the Senate’s agenda during the limited time they have in Washington, including funding battles, debates on various issues, and addressing nominations.

If the bill manages to clear the Senate Banking Committee, it will need to be merged with the version that passed the Senate Agriculture Committee. This merger work is crucial but is being eaten into by the current delays. The final legislation is expected to undergo further revisions, particularly regarding an ethics piece aimed at limiting senior government officials from profiting off of crypto interests.

Assuming the bill garners enough support to pass the Senate, it will then need approval from the House, as it differs significantly from the version advanced by the chamber last year. The final step would be President Trump’s signature, which is expected to be straightforward, despite some uncertainty he introduced in March regarding his stance on signing bills.

The Digital Asset Market Clarity Act, if approved, would be the second major crypto bill to become law, following last year’s GENIUS Act. However, unresolved issues from the GENIUS Act, particularly related to stablecoin rewards, have delayed progress on the Clarity Act. The ongoing debate has involved White House interventions and strong rhetoric from crypto insiders, with Coinbase playing a prominent role in advocating for stablecoin reward programs.

The clock is ticking for the crypto Clarity Act, with every day that passes without progress decreasing the odds of its success. The next crucial step is the scheduling of a markup hearing and the release of the long-awaited bill text that negotiators have been working on. The future of the Clarity Act remains uncertain, with potential delays and unresolved questions posing significant challenges to its passage into law. The lame duck session of Congress, which occurs at the end of the year, is a time when the outgoing Congress can still take action on pending legislation. One piece of legislation that could potentially resurface during this time is the Clarity Act, which has been a hot topic for crypto insiders.

While many in the crypto industry are eager for immediate action on the Clarity Act, they are also playing the long game when it comes to political strategy. Crypto political action committees (PACs) have been actively investing millions of dollars to build relationships with members of Congress from both parties. Fairshake, the leading campaign-finance arm of the sector, has been careful to support candidates from across the political spectrum, ensuring that the industry has allies in Congress regardless of party affiliation.

If the Clarity Act is passed into law before the next Congress takes office, the crypto industry may have other legislative priorities to focus on. These could include a potential tax overhaul and the establishment of a federal stockpile of bitcoin, a move that could have significant implications for the industry.

Overall, the crypto industry is actively engaged in the political process and is working to ensure that its interests are represented in Congress. The upcoming lame duck session could provide an opportunity for the Clarity Act to be revisited, but regardless of the outcome, the industry is prepared to continue advocating for policies that support its growth and development.