The Senate Banking Committee will not mark up the CLARITY Act before its early-May recess after Senator Thom Tillis asked Chair Tim Scott for additional negotiating time. Galaxy Digital now puts the odds of 2026 passage at 50-50.
The Senate Banking Committee will not mark up the CLARITY Act before its early-May recess, after Senator Thom Tillis asked Chair Tim Scott for additional time to negotiate a stablecoin yield compromise with banking lobbyists, three Hill sources confirmed this week. The earliest the bill can now reach committee is the week of May 11, ten months after the House passed its version and four months after senators began publicly insisting they were close to a deal.
The delay matters because the political calendar matters. After May, the committee gets pulled into appropriations season, then the August recess, then a fall stretch in which floor time is dominated by spending fights and confirmation hearings. Galaxy Digital's head of research Alex Thorn now puts the odds of the CLARITY Act becoming law in 2026 at 50-50, and possibly lower. He had it at 70% in February. The House version is sitting on the Senate floor, the framework is broadly agreed, and the bill is still slipping by months, not weeks.
Tillis's intervention came at the request of the North Carolina Bankers Association, which has been running a parallel lobbying campaign for nearly a year arguing that any stablecoin reward mechanism not explicitly capped will compete with insured bank deposits. The math, from the banking side, is direct. Community banks fund mortgages and small-business loans out of cheap deposits; deposits priced at zero or near-zero only stick because no comparable instrument exists for everyday savers. A stablecoin earning 4% wrecks that.
The crypto side argues the opposite. Issuers like Circle earn yield on the Treasury bills backing their stablecoins; if regulators force that yield to flow only to issuers and not to holders, they are effectively legislating a transfer of wealth from end users to a small number of corporate balance sheets. The compromise that Tillis negotiated with Senator Mark Alsobrooks back in March was supposed to settle this — issuers could pass through yield, with disclosure and reserve requirements attached. Then the bankers came back. They argued the disclosures were toothless and the carve-out too broad, and Tillis decided to reopen the file.
Two other provisions are still live. The DeFi language drafted by the House remains contested, with several Democrats including Senator Elizabeth Warren citing illicit-finance concerns about non-custodial protocols that cannot identify their users. Warren's argument has the support of Treasury staffers who have spent the past eighteen months telling whoever will listen that protocols like Tornado Cash represent a structural sanctions risk. The counter-argument, which has gained traction in Senate Banking under SEC Chair Paul Atkins, is that DeFi protocols are software and software is speech. The committee has not picked a side.
The third sticking point is ethics — specifically, language drafted by Senator Catherine Cortez Masto that would bar senior executive-branch officials from personally profiting from crypto assets during their tenure. The provision is not aimed at anyone in particular, in the official telling, though every staffer asked about it volunteers the name of a sitting cabinet member as the obvious target. Republicans have agreed in principle to ethics language. They have not agreed to that specific draft.
Senator Cynthia Lummis told reporters on Tuesday that lawmakers are "close" to finalising the bill and expect a markup in May, language that is consistent with what she has been saying since the new Congress was sworn in. Lummis is not on Banking and her timeline guidance has been historically optimistic. Tillis's office, which is on Banking, has declined to commit to a date.
What lobbyists on both sides agree on is that the bill in its current form is more or less acceptable to everyone — but neither side is willing to be the one that signs it before the other concedes a final point. The North Carolina bankers want a tighter yield cap. The exchanges want clearer custody language. The Democrats want stronger ethics provisions. None of these is a structural objection. Each is enough to delay a vote.
The Bitcoin treasury crowd does not need the CLARITY Act to function. Issuers like Agora, which filed for an OCC trust charter last week, are routing around the legislation entirely by securing federal banking status under existing authority. The Senate's delay tells the market to find its own answers. The market is already doing that.
Banking Committee staff have circulated a revised stablecoin-yield section to industry groups in the past 48 hours. Whether that draft survives contact with Tillis's bankers is the question that will determine whether the CLARITY Act reaches a vote before recess in 2026. On Thursday's count, it has not.
