CLARITY Act Advances Toward Senate Vote as Stablecoin Debate Intensifies in Washington
Lawmakers push the CLARITY Act toward a Senate vote as debates over stablecoin yield, banking risks, and crypto regulation intensify in Washington, signaling a pivotal moment for U.S. digital asset policy.
U.S. lawmakers are signaling renewed momentum on digital asset legislation, with the cryptocurrency-focused CLARITY Act potentially heading to the full Senate as early as this month, even as key disagreements around stablecoin regulation remain unresolved.
Speaking on April 6 at Vanderbilt University’s Digital Assets and Emerging Tech Policy Summit, Sen. Bill Hagerty said the bill could move through the Senate Banking Committee during the upcoming work period beginning April 13.
“There are several issues still outstanding… none of them are insurmountable,” Hagerty said, adding that he expects the legislation to advance out of committee and toward a full Senate vote before the end of April.
Notably, the bill's progress now hangs in the balance without the efforts of David Sacks, President Donald Trump's "Crypto Czar" who recently stepped down after 130 days in his role.
Bart Hillerich
Stablecoin Yield Remains Central Flashpoint
At the center of the CLARITY Act negotiations is a contentious debate over whether crypto platforms should be allowed to offer yield or rewards on stablecoins.
A draft version of the bill circulated in late March reportedly proposed restricting such incentives, a move that sent ripples through digital asset markets. Yield-bearing stablecoins have become a foundational mechanism for attracting both retail and institutional capital into crypto platforms, particularly in DeFi and CeFi lending environments.
Bart Hillerich
The proposal has exposed a widening divide between crypto firms and traditional banks. Digital asset companies argue that stablecoin rewards are essential for innovation and user adoption, while banks warn that allowing interest-like payouts could accelerate deposit outflows from the traditional financial system.
Paul Grewal, chief legal officer at Coinbase, recently dismissed concerns about deposit flight as “theoretical,” stating there is no clear evidence that stablecoin yields materially threaten banking stability.
Still, analysts remain cautious. TD Cowen’s Jaret Seiberg said the likelihood of a version of the bill passing both chambers of Congress remains limited, estimating the odds at roughly one in three. He noted that any compromise restricting passive yield could reduce stablecoins’ appeal as a liquidity management tool.
Legislative Progress Amid Broader Regulatory Activity
The CLARITY Act has faced repeated delays since early 2026, including a January stall driven by banking sector opposition and a March impasse over how to classify stablecoin rewards. A tentative agreement between lawmakers and the White House in late March helped revive negotiations, though final language has yet to be publicly released.
Bart Hillerich
The bill is part of a broader push in Washington to establish a regulatory framework for digital assets, alongside parallel efforts to implement the GENIUS Act.
In recent days, the U.S. Treasury has opened a 60-day public comment period on proposed guidelines for how state-level stablecoin oversight should align with federal standards under GENIUS. At the same time, regulators including the Federal Reserve and FDIC have raised concerns about reserve quality, liquidity risks, and the potential for regulatory arbitrage among issuers.
Federal Reserve Governor Michael Barr emphasized that stablecoin resilience will depend heavily on how these rules are implemented, warning that issuers may be incentivized to take on additional risk in pursuit of higher returns.
Expanding Federal Oversight Across Crypto Markets
Beyond stablecoins, federal agencies are increasingly asserting jurisdiction across different segments of the crypto ecosystem.
The Commodity Futures Trading Commission (CFTC), which is expected to play a leading role in digital asset oversight under CLARITY, has recently taken action to defend its authority over prediction markets. The agency filed lawsuits against multiple U.S. states, arguing they are interfering with its jurisdiction over event-based contracts.
Meanwhile, the Department of Justice has intensified enforcement against alleged market manipulation, charging multiple foreign market-making firms with orchestrating wash trading schemes designed to inflate token prices and trading volumes.
At the same time, other policy developments point to growing institutional integration of digital assets. The Department of Labor is now considering rules that would allow cryptocurrencies to be included in 401(k) retirement plans, while the Office of the Comptroller of the Currency has continued granting conditional trust charters to crypto firms seeking to expand custody and infrastructure services.
A Defining Moment for U.S. Crypto Policy
These developments represent a historic, transitional moment for digital asset regulation in the United States. While momentum behind the CLARITY Act suggests progress toward a comprehensive framework, the outcome remains uncertain as lawmakers navigate competing interests across banking, crypto, and regulatory stakeholders.
With stablecoin incentives the defining issue, the coming weeks will likely determine the fate of the legislation and how capital flows across the next generation of on-chain financial systems.
