The U.S. Senate’s effort to move the Clarity Act forward could slip into May as lawmakers deal with growing pressure from banking groups and continue working through key parts of the bill.
A Monday report from Crypto in America said the Senate Banking Committee (SBC) has only a limited window this week to schedule a markup before lawmakers head into recess.
If that opportunity is missed, the next realistic chance for action may move to the second week of May.
The timeline is getting tighter because the committee is also busy with President Donald Trump’s nomination of Kevin Warsh to replace Federal Reserve Chair Jerome Powell.
Warsh will appear before SBC on Tuesday, which is expected to take up much of the committee’s focus early in the week. After that, lawmakers would need to schedule a markup by Friday if they want to hold a vote during the week of April 27.
A major reason for the possible delay is the fight over stablecoin yield. The report says banking groups, including the North Carolina Bankers Association, have been urging member banks to contact Senator Thom Tillis’s office over concerns about the current draft.
Those groups are unhappy with how the bill handles yield restrictions tied to stablecoins, and Tillis reportedly wants to hear them out before the legislation moves ahead.
Stablecoin yield debate remains central
The latest push follows more than two months of discussions between crypto companies and banking groups.
Crypto in America reported that negotiators reached a compromise late last month, and the crypto industry seems mostly at ease with it, or at least has not openly pushed back.
Even so, the draft language has still not been made public. It has only been shared with a small circle of bank and crypto representatives, which has only made the talks more tense.
Pressure from banks appears to have increased after the White House Council of Economic Advisers released a report on stablecoin yield that downplayed the threat to the banking system.
In its report, the council said banning stablecoin yields would increase total U.S. bank lending by only about $2.1 billion, or just 0.02 percent of a $12 trillion loan market. At the same time, it estimated that consumers could lose around $800 million in returns.
Since then, lobbying seems to have spread beyond Senator Thom Tillis and Senator Angela Alsobrooks, who have been leading the talks on the issue.
The report added that several matters still remain unresolved, including ethics concerns and parts of the bill tied to decentralized finance, or DeFi.
Tillis said there are still “open switches” that may require more negotiation, but he added that he remains optimistic about scheduling a markup in the coming weeks.
That leaves the bill moving forward, but with uncertainty around when exactly it will reach the next stage.
Fresh DeFi hacks add pressure
At the same time, another major DeFi exploit is adding urgency to the broader policy debate.
The newsletter reported that Kelp DAO, an Ethereum-based liquid restaking project, suffered an exploit of roughly $290 million over the weekend.
The attack reportedly caused wider liquidity stress across DeFi markets, including at Aave, one of the sector’s largest lending protocols.
According to the report, onchain investigators said the attackers appear to have used a compromised cross-chain bridge to borrow funds through Aave. That move pushed one lending pool to full utilization, making it more difficult for lenders to withdraw their assets.
In response, Aave froze the affected markets, while Kelp DAO paused its rsETH contracts during the investigation. The report also said LayerZero believes North Korea’s Lazarus Group was likely behind the attack.
Meanwhile, Washington’s lawmakers are still deciding how the CLARITY Act should deal with illicit finance in DeFi, especially as recent major hacks have made the issue more urgent.
Why the CLARITY Act matters
The CLARITY Act was passed by the House last July and is awaiting Senate approval. If approved, it would become the first significant federal digital asset framework in the U.S.
As of now, the crypto companies are still grappling with a particular maze of state regulations and federal jurisdiction.
The CLARITY Act is meant to bring more clarity to the crypto market. It would spell out which regulators are responsible for different areas and lay down basic rules for registration, consumer protection, and how the market should operate.
Individuals who advocate the bill believe that it would help crypto firms in the United States live easier. By having more clarity in the rules, companies will be more willing to release new products, recruit more employees, and expand their business operations.
Treasury Secretary Scott Bessent has recently asked Congress to pass the CLARITY Act. He said that unclear crypto rules are a major problem in the U.S. Coinbase CEO Brian Armstrong also supported the push for Congress to pass the bill.