Clarity Act Stalls as Senate Gridlock Intensifies

Stablecoin Dispute Blocks Legislative Progress

The CLARITY Act remains stalled in the Senate Banking Committee despite earlier bipartisan support. The bill passed the House in July 2025 with a 294–134 vote, signaling strong initial backing. However, disagreements over stablecoin yields have created a major obstacle.

Banks argue that allowing crypto platforms to offer yield-like rewards could trigger deposit outflows. They warn that reduced deposits may weaken lending capacity. Crypto firms, on the other hand, maintain that stablecoin rewards support their revenue models and user growth. This conflict has prevented consensus, as both sides continue to resist compromise.

The dispute reflects broader tensions between traditional finance and digital asset platforms. Lawmakers must balance financial stability concerns with innovation demands. Without agreement on this issue, the bill cannot advance to the next stage.

Industry Pushback and Senate Delays

Momentum weakened further in January 2026 when Brian Armstrong withdrew support for the Senate draft. He criticized provisions affecting stablecoin rewards and other industry concerns. Shortly after his statement, the Senate Banking Committee postponed its markup vote indefinitely.

This decision disrupted the legislative timeline and delayed progress by several months. The Senate Agriculture Committee approved its portion of the bill in January, yet the Banking Committee has not scheduled a new markup date. Ongoing negotiations continue, but lawmakers have not finalized key provisions.

The absence of a scheduled vote keeps the bill in legislative limbo. Each delay reduces the likelihood of timely passage. Industry divisions also complicate negotiations, as stakeholders push for favorable terms.

Time Pressure and External Priorities

The legislative calendar now poses a serious challenge. Lawmakers must move the bill through committees, secure Senate approval, and reconcile it with the House version. These steps require time and coordination.

However, attention is shifting toward the 2026 United States midterm elections. As election season approaches, legislative priorities often change. If the Senate does not act soon, the bill may face further delays or lose momentum entirely.

At the same time, geopolitical tensions, including issues involving Iran, have redirected focus toward national security matters. This shift reduces the time available for financial legislation.

The CLARITY Act now faces overlapping challenges. Policy disagreements, industry resistance, and limited legislative time continue to slow its progress.

This article was originally published as Clarity Act Stalls as Senate Gridlock Intensifies on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.