The landmark US crypto market-structure bill entered Easter recess without a markup date, imperilling its chances of becoming law before November's midterm elections.
The legislation that was supposed to end years of regulatory uncertainty for the US cryptocurrency industry entered the congressional Easter recess at the end of March without a Senate Banking Committee markup date on the calendar, deepening a stalemate that now threatens the bill's chances of becoming law before November's midterm elections. The Digital Asset Market Clarity Act, known as the CLARITY Act, has been blocked by four distinct factions inside and outside the Senate, each with the leverage to prevent the bill from advancing.
Senator Tim Scott, the Banking Committee chairman, has targeted the second half of April for the crucial markup session. But the bill went into the recess period on March 28 with the stablecoin yield text unresolved, three additional policy disputes outstanding, and no revised draft circulated to negotiators. According to FinTech Weekly, a revised text had been expected before the recess but was not published, leaving the bank-friendly March 23 draft as the de facto negotiating baseline heading into April.
The stakes extend well beyond the cryptocurrency sector. The CLARITY Act would establish the first comprehensive federal framework for digital asset market structure in the United States, clarifying which tokens are treated as commodities under CFTC jurisdiction and which remain securities regulated by the SEC. Failure to advance the bill from committee before May could, in the words of Senator Bernie Moreno, effectively kill the legislation until at least 2027.
The Stablecoin Yield Dispute at the Core of the Impasse
The bill's most contested section concerns whether cryptocurrency platforms can offer rewards to users simply for holding stablecoins — the dollar-pegged digital tokens that have become the backbone of crypto trading and decentralised finance. Banks have argued that allowing platforms to pay yield on stablecoin balances would trigger deposit flight from the traditional banking system, as consumers moved cash to earn higher returns outside the regulated deposit framework.
The compromise negotiated by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) in late March would prohibit what the draft text calls passive yield — rewards paid simply for holding a stablecoin — while permitting activity-based rewards tied to payments, transfers, and platform use. The SEC, CFTC, and Treasury would be given twelve months to define the precise boundary between the two categories.
The distinction is financially material for Coinbase, the largest US crypto exchange. The company generated $1.35 billion in stablecoin-related revenue in 2025, representing 19.6% of its total net revenue, with the fourth quarter alone contributing a record $364.1 million. Coinbase's rewards programme distributes a portion of interest earned on USDC reserves to eligible users — a structure that Coinbase's own legal team has stated the March 23 draft text would prohibit directly, indirectly, and through anything economically or functionally equivalent to bank interest. The company has made removal of the restriction a condition of its support for the bill. Stripe, which processes stablecoin payments for business customers, has also objected to the yield restrictions.
Four Blocking Factions and the Four Steps That Remain
The stablecoin yield dispute represents only one of four concurrent conflicts capable of derailing the legislation. The second concerns DeFi provisions, where Senate Democrats have raised illicit finance concerns about the bill's treatment of decentralised protocols. The third involves ethics language governing whether senior government officials can personally profit from crypto assets while in office, a provision that has gained urgency as members of the Trump administration disclosed significant digital asset holdings. The fourth is an attempt by Senate Republicans to attach community bank deregulation provisions to the bill, a move that has drawn opposition from Democrats who regard it as unrelated legislation.
Even if all four disputes are resolved in time for a late-April markup, the bill faces a demanding legislative path. Following the Banking Committee vote, the CLARITY Act must reconcile with a separate version advanced by the Senate Agriculture Committee, then reconcile with the House-passed version approved in July 2025, and finally secure sixty votes on the Senate floor before reaching the President's desk. Senator Moreno's office has warned that if the Banking Committee markup does not occur before May, the midterm election cycle will effectively foreclose the legislative window.
The bill has a troubled predecessor: Congress's last serious attempt to pass comprehensive crypto market-structure legislation collapsed in the aftermath of FTX's bankruptcy in November 2022, leaving a regulatory vacuum the CLARITY Act is specifically designed to close. A similar failure in the current Congress would leave the industry operating under securities and commodities rules designed for conventional financial instruments rather than digital assets.
Regulators Step Into the Legislative Vacuum
The prolonged deadlock has prompted both the SEC and CFTC to take unilateral action rather than wait for Congress. In late March, the two agencies signed a new memorandum of understanding establishing clearer boundaries between their respective jurisdictions over crypto assets. The SEC separately issued an interpretive release clarifying how federal securities laws apply to specific categories of digital tokens, establishing a taxonomy that distinguishes digital commodities, digital collectibles, digital tools, stablecoins, and digital securities.
On March 17, the two agencies jointly classified XRP as a digital commodity, delivering one of the most-anticipated regulatory determinations in the crypto industry. XRP holders had hoped the CLARITY Act would codify that classification into statute — making it reversible only through future legislation — but the joint agency action provided the same practical outcome without waiting for Congress. The regulatory action has paradoxically reduced urgency for some stakeholders while intensifying frustration among XRP holders who believe Coinbase's yield-related objections are blocking legislation they want.
The SEC has scheduled a regulatory roundtable specifically on the CLARITY Act for April 16, two days after the Senate returns from Easter recess on April 13. The roundtable is expected to surface industry positions on outstanding technical disputes, potentially providing the Banking Committee with clearer guidance on areas where legislative and regulatory approaches overlap.
April's Narrow Window and What Comes Next
The Senate's return on April 13 begins what White House Crypto Council Executive Director Patrick Witt described as a critical period for US crypto legislation. A markup in the second half of April would leave what Senate aides have characterised as a window measured in weeks to complete the four remaining legislative steps before midterm season constrains the calendar.
Coinbase's chief legal officer stated in early April that a deal on stablecoin yield was very close, a signal that at least one of the four blocking factions may be approaching resolution. The company's separate receipt of OCC approval for a national bank trust charter in early 2026 has also given it an alternative regulatory pathway, which some observers believe may reduce the intensity of its yield-related objections in negotiations.
The April markup, if it occurs, will represent the CLARITY Act's last realistic opportunity to become law in the current Congress. Whether the four factions — industry, banking, regulators, and structural critics — can align around a single text in the weeks following Easter recess will determine whether the United States enters 2027 with a federal crypto market structure framework or continues to operate in the regulatory ambiguity that has defined the sector since the emergence of decentralised finance.
