Key takeaways
- The Senate Banking Committee has confirmed a markup of the CLARITY Act for the second half of April 2026, with only two in-session weeks available: April 13 and April 20.
- Senator Bernie Moreno warned that if the bill does not pass by May, crypto market structure legislation could stall until after the 2026 midterms.
- A bipartisan deal on stablecoin yield between Senators Tillis and Alsobrooks bans passive yield on held stablecoins while allowing activity-based rewards.
- Open issues remain on DeFi protocol treatment, ethics provisions for government officials holding crypto, and potential community bank deregulation attachments.
Published: April 1, 2026 12:00 UTC
The Digital Asset Market CLARITY Act faces its most consequential test this month. The Senate Banking Committee has confirmed a markup for the second half of April, and lawmakers say the bill must clear the full Senate by May or risk being shelved until 2027.
The CLARITY Act is a bipartisan bill that would create the first comprehensive regulatory framework for digital assets in the United States, defining which tokens fall under Securities and Exchange Commission (SEC) jurisdiction and which belong to the Commodity Futures Trading Commission (CFTC). The House passed it 294-134 in July 2025, and the Senate Agriculture Committee advanced it in January 2026.
The April window is narrow
Congress returns from Easter recess on April 13. That leaves exactly two working weeks before Memorial Day recess begins on May 21. Senator Cynthia Lummis, the bill’s lead Republican co-sponsor, confirmed the Banking Committee will hold its markup during this window.
Senator Bernie Moreno put the stakes plainly: “If we don’t get the Clarity Act passed by May, digital asset legislation will not pass for the foreseeable future.” The midterm election cycle is expected to consume the Senate’s legislative calendar from June onward, making any post-May action on crypto regulation unlikely before 2027.
Stablecoin yield deal clears the biggest hurdle
The markup was originally scheduled for January but collapsed over a dispute about whether stablecoin issuers could offer yield to holders. Banks argued that yield-bearing stablecoins would compete directly with deposit accounts, while crypto firms like Coinbase pushed to preserve the feature.
On March 20, Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) announced a bipartisan agreement. The compromise bans passive yield on held stablecoins under Section 404 of the bill but allows activity-based rewards tied to payments, transfers, and wallet usage. Staff and stakeholders continued refining the language through the recess period, and the text is described as “99% resolved.”
The deal represents a concession from the crypto industry. Coinbase CEO Brian Armstrong, who pulled the company’s support over the yield restrictions in January, has not publicly commented on the revised terms.
Four issues still unresolved
The stablecoin yield compromise was the largest obstacle, but four other disputes could still delay or derail the markup.
First, DeFi treatment. A decentralized finance protocol is a set of smart contracts that execute financial transactions without a central intermediary. Updated language is expected to clarify that developers and non-custodial protocols will not be treated as financial intermediaries, but several Senate Democrats have raised concerns about illicit finance risks.
Second, ethics provisions. Democrats want language barring senior government officials from personally profiting from crypto holdings. Republicans counter that existing Office of Government Ethics rules already cover this and that the provision falls outside the Banking Committee’s jurisdiction.
Third, community bank deregulation. Senate Banking Republicans have discussed attaching community bank deregulatory measures to the CLARITY Act as part of a broader legislative trade involving housing policy. This addition could complicate the bill’s path by expanding its scope beyond digital assets.
Fourth, the interaction with existing SEC-CFTC guidance. On March 17, the two agencies issued a joint interpretation establishing a token taxonomy that classifies assets into five categories: digital commodities, digital collectibles, digital tools, stablecoins, and digital securities. Both agency chairs described this interpretation as a transitional measure until Congress passes a statutory framework. If the CLARITY Act stalls, this administrative guidance becomes the de facto regulatory structure for the industry.
What happens next
The Banking Committee markup is the first of several hurdles. If the bill clears committee, it still needs a full Senate floor vote, reconciliation with the House version, and the president’s signature. Each step faces its own timeline pressure.
For the crypto industry, the April markup will signal whether the United States gets a permanent regulatory framework for digital assets this year or defaults to agency-level guidance that can shift with future administrations. For stablecoin issuers, the yield compromise will reshape how they design products and compete with traditional banks.
The clock starts April 13.
FAQ
What is the CLARITY Act?
The Digital Asset Market CLARITY Act is a bipartisan U.S. bill that creates a regulatory framework for crypto assets by defining which tokens are securities (regulated by the SEC) and which are commodities (regulated by the CFTC). The House passed it in July 2025, and the Senate Banking Committee has scheduled a markup for late April 2026.
Why is the May deadline important for crypto regulation?
Senator Bernie Moreno has warned that if the CLARITY Act does not pass the Senate by May 2026, digital asset legislation will stall until after the 2026 midterm elections. Congress breaks for Memorial Day recess on May 21, and midterm campaign activity is expected to dominate the legislative calendar afterward.
What does the stablecoin yield compromise mean for crypto users?
The bipartisan deal bans passive yield on held stablecoins, meaning issuers cannot pay interest simply for holding their tokens. However, activity-based rewards tied to payments, transfers, and platform usage are still allowed. This shifts the stablecoin business model away from savings-like products and toward transactional use cases.
