CLARITY Act deadline looms as Senate gridlock stalls US crypto regulation

The crypto industry is racing to pass the CLARITY Act before a two-week window closes, but Senate gridlock and banking-industry pressure threaten to keep the bill stalled until 2030. The bill advanced in the House (July 2025) and is now stuck in the Senate, where Senate Banking has not scheduled a markup vote. Key driver: a fight over stablecoin “yield” rights. Traditional banks warn that allowing interest on yield-bearing stablecoins could trigger deposit flight and squeeze bank lending. The American Bankers Association (ABA) argues community banks would be forced into costlier funding, raising credit costs for small businesses. Counterpoint from the White House: a multi-agency effort centered on a Council of Economic Advisers report claims the macroeconomic risks are overstated. It estimates that banning stablecoin interest would shift US bank lending by only ~$2.1B (about 0.02%), while allowing yields could avoid an estimated ~$800M in annual welfare loss. Notable figures and political timing: Coinbase CEO Brian Armstrong reversed course after a US Treasury push, publicly urging lawmakers to pass the CLARITY Act. Still, Senate Banking Chair Tim Scott has not scheduled a markup date. If the committee does not act soon, procedural timelines imply the bill must clear Banking by mid-May to reach a floor vote before Memorial Day; missing summer could push decisive action into a less crypto-friendly post-election environment. Market watch: Polymarket and Kalshi show odds falling materially for CLARITY Act passage this year, reflecting growing regulatory uncertainty for US crypto markets.