The Digital Asset Market Clarity Act, the most important crypto regulatory law in US history, is stuck in the Senate. In July 2025, the House of Representatives passed the bill with a broad majority of 294 to 134 votes. But in the Senate, a dispute over stablecoin interest payments has blocked progress for months.
The Clarity Act would establish clear rules for the first time on which digital assets fall under the SEC and which under the CFTC. Specifically, the CFTC would receive exclusive jurisdiction over spot markets for so-called "Digital Commodities." Meanwhile, the SEC would remain responsible for assets classified as "Investment Contract Assets." This split would end years of regulatory uncertainty. Until now, many crypto companies simply did not know which agency had jurisdiction over them.
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Stablecoin interest as the centralpoint of contention
On January 14, 2026, the Senate Banking Committee postponed its planned Clarity Act markup on short notice. Over 100 amendments were on the table. At its core, the dispute centers on whether stablecoin issuers or crypto platforms should be allowed to pay interest on stablecoin balances to their users.
The American Bankers Association (ABA) demands a strict ban. In their view, interest-bearing stablecoins would function as shadow savings accounts and drain deposits from the banking system. Yet the crypto industry pushes back. At minimum, transaction-based rewards should remain permitted.
A compromise proposal would ban interest on idle stablecoin balances but allow transaction-based rewards. Still, the ABA formally rejected the White House-brokered compromise draft on March 5, 2026. As a result, negotiations continue.
Two committees, one law: the Clarity Act in the senate
The legislative process in the Senate is unusually complex. Two committees are working on separate drafts in parallel. On January 29, 2026, the Senate Agriculture Committee passed its text by a vote of 12 to 11. That vote fell along party lines. However, the Senate Banking Committee has not yet held its markup.
Both drafts must be merged before a full Senate vote. Only then does reconciliation with the House text follow. Senator John Boozman, chair of the Agriculture Committee, is pushing for speed:
"After months of work, we are trying to make significant progress. Now it is time to move this process forward." - John Boozman, Senator (R-AR)
At the same time, Democratic support remains absent. Republicans need votes from across the aisle for a full Senate vote. Yet Democrats demand conflict-of-interest rules for politicians with crypto holdings. Public Citizen calls the bill the "Gryfto Bill," alluding to Trump's crypto investments through World Liberty Financial and the TRUMP memecoin.
GENIUS Act as a precedent
The Clarity Act is not the only crypto law in play. Trump signed the GENIUS Act, a separate stablecoin regulatory law, on July 18, 2025. This law prohibits stablecoin issuers from paying interest or yields directly to users.
On February 25, 2026, the Office of the Comptroller of the Currency (OCC) published a regulatory proposal for implementation. The agency signaled tighter limits on stablecoin rewards than expected. Consequently, this strengthens the banking lobby's negotiating position in the Clarity Act process. If implementation rules for the GENIUS Act turn out restrictive, a more liberal approach becomes harder to push through. The comment period for the OCC proposal runs until May 1, 2026.
In terms of content, the Clarity Act builds on the FIT21 law, which passed the House in May 2024. It goes further, though, and includes DeFi protection provisions alongside the jurisdictional split between the SEC and CFTC. Under these provisions, software developers and peer-to-peer activities receive protection. Only centralized intermediaries face compliance requirements. The guiding principle remains "control rather than code."
Political pressure from all sides
Trump increased pressure on the banking lobby on March 3, 2026, via Truth Social. Banks block the law, he warned, and the crypto industry will migrate to China. Meanwhile, the Fairshake Super PAC, funded by the crypto industry, has allocated $193 million for the 2026 midterm elections. Significant political capital is at stake on both sides.
Ripple CEO Brad Garlinghouse estimates the probability of passage by the end of April 2026 at 80 to 90 percent. JPMorgan analysts see passage by mid-2026 as a "positive catalyst" for digital assets. Still, the situation remains fragile. Summer Mersinger, CEO of the Blockchain Association, tempers expectations:
"These are complex negotiations with multiple stakeholders, and it takes sustained engagement to bridge significant policy differences." - Summer Mersinger, CEO Blockchain Association
Next steps through Summer 2026
The Senate Banking Committee targets a second markup attempt by the end of March 2026. Whether this happens depends on reaching an agreement on stablecoin interest. After a successful markup, the drafts from both Senate committees would need merging. Then comes the full Senate vote and finally reconciliation with the House text. The hardest deadline falls before August 2026. That is when midterm campaigning begins, and the window for controversial votes closes entirely. On prediction markets, odds are already declining. Polymarket traders put the probability of passage this year at 60%.
