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Analysts warn the CLARITY Act must pass a Senate committee by April or chances of 2026 passage drop sharply.
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Dispute over stablecoin rewards between banks and crypto firms remains the main legislative obstacle.
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Additional debates on DeFi regulation, SEC authority, and developer protections could delay the bill further.
A narrowing legislative window could stall the proposed U.S. CLARITY Act, a bill designed to set rules for digital asset markets. According to Alex Thorn, head of research at Galaxy Digital, the measure must pass a Senate committee by the end of April. Thorn warned that failure to meet that deadline could sharply reduce chances of passage in 2026.
Senate Timeline Creates Pressure for CLARITY Act
Alex Thorn outlined the timeline concerns in a public statement on X. He said the legislation must reach the Senate floor by early May. According to Thorn, floor time in the Senate continues to shrink. Each delay lowers the probability of passing market structure legislation this year.
Scheduling priorities in Washington also complicate the timeline. Senate Majority Leader John Thune indicated lawmakers will first address the SAVE America Act. That proposal would require individuals to show proof of U.S. citizenship when registering to vote.
As a result, digital asset legislation may wait until April. However, Thorn said the committee vote remains the key procedural step. Without it, the bill may struggle to advance further in 2026.
Stablecoin Rewards Debate Blocks Progress
Currently, lawmakers disagree on whether stablecoin issuers can offer yield or rewards. The issue has become the central dispute delaying the CLARITY Act. Traditional banking groups argue that rewards could pull deposits away from banks. Meanwhile, crypto companies say incentives could expand stablecoin utility.
Thorn noted that the rewards debate dominates the current discussion. However, he warned that it may not represent the final obstacle. Other policy questions could emerge once the rewards dispute ends. These include decentralized finance regulation and protections for blockchain developers.
Additional Policy Disputes Remain Unresolved
Further complications may arise from regulatory authority debates. Lawmakers still discuss the balance of power between agencies such as the SEC.
Thorn also referenced ethics provisions and developer protections as potential flashpoints. These issues remain largely unresolved behind closed doors.
Earlier drafts illustrate the political divisions. A Senate Banking Committee discussion draft released in January followed a largely partisan process. However, lawmakers continue exploring compromises. Senator Angela Alsobrooks said both banking and crypto groups may need concessions.
External analysts also remain cautious about the timeline. Investment bank TD Cowen warned that broader crypto legislation could face delays until 2027. Under that scenario, final rules may not take effect until 2029.
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