Clarity Act Crypto Bill Stalls Amid Four-Way Deadlock

Competing interests over stablecoin economics, regulatory oversight, and investor protections block progress on unified crypto rules.

Apr. 2, 2026 at 2:10pm

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The CLARITY Act, intended to provide a federal framework for crypto regulation, has stalled in Congress due to a four-way deadlock between industry backers, bank-aligned critics, regulators, and structural critics. Each group has different priorities around issues like stablecoin yields, agency coordination, and the preservation of investor protections, making it difficult to reach a compromise.

Why it matters

The outcome of the CLARITY Act will determine whether crypto can compete directly with traditional financial services or be confined to a more constrained regulatory perimeter. Failure to pass the bill leaves crypto firms operating in a patchwork regime shaped by enforcement actions and agency guidance, while banks retain tighter control over dollar-based financial activity.

The details

The CLARITY Act entered Congress as an attempt to impose a durable market structure on crypto, but it has become a battleground for four factions with divergent goals. Industry backers and Senate supporters want a federal framework that gives crypto firms a clear path into regulation, while bank-aligned critics aim to seal off stablecoin yields and prevent deposit economics from migrating out of the banking system. Regulators, meanwhile, are issuing their own interpretive guidance, reducing the urgency for a congressional solution. Structural critics argue the bill could create bespoke exemptions that weaken investor protections.

  • In January, Senate Banking Chairman Tim Scott said the committee would postpone its markup while bipartisan negotiations continued.
  • In late January, the Senate Agriculture Committee advanced related market-structure legislation, keeping momentum alive while underlining that the main bottleneck had shifted into the negotiating room.
  • By March, the fight over stablecoin rewards had become the central pressure point in the bill, with public reporting and congressional chatter converging on the need to reconcile crypto's push for broader utility with banking concerns about disintermediation and deposit competition.

The players

Senate Banking Committee

The Senate committee with jurisdiction over the CLARITY Act, which has outlined a framework that draws lines between the SEC and CFTC while adding tailored disclosures and anti-fraud protections.

Bank Policy Institute

A group representing major banks that has argued lawmakers need to prevent stablecoin structures from recreating deposit-like products outside the traditional banking perimeter.

SEC

The Securities and Exchange Commission, which has issued new interpretive guidance clarifying how federal securities laws apply to crypto assets.

CFTC

The Commodity Futures Trading Commission, which has aligned publicly with the SEC's crypto guidance and added related FAQs.

Better Markets

A nonprofit group that has argued crypto bills like the CLARITY Act could create bespoke exemptions that weaken investor protections.

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What they’re saying

“We must not let individuals continue to damage private property in San Francisco.”

— Robert Jenkins, San Francisco resident

“Fifty years is such an accomplishment in San Francisco, especially with the way the city has changed over the years.”

— Gordon Edgar, Grocery employee

What’s next

The judge in the case will decide on Tuesday whether or not to allow Walker Reed Quinn out on bail.

The takeaway

This case highlights growing concerns in the community about repeat offenders released on bail, raising questions about bail reform, public safety on SF streets, and if any special laws to govern autonomous vehicles in residential and commercial areas.