Despite strong backing from President Donald Trump and ongoing discussions at the White House, the CLARITY Act — the Senate’s long-debated crypto market structure bill — remains stalled as political divisions persist and the midterm elections draw closer.
The legislation has been slowed by continued resistance from Senate Democrats and the banking industry, both of which have raised objections to key provisions, particularly those related to stablecoin rewards.
Banking Committee Markup Hinges On Tillis
According to a Thursday update from journalist Eleanor Terrett of Crypto In America, one Republican senator may now hold decisive influence over the CLARITY Act’s next steps in the Senate Banking Committee.
Terrett reported that Senator Thom Tillis of North Carolina appears to be central to resolving the ongoing dispute over stablecoin yield and reward programs.
Tillis had previously emerged as a potential holdout in January when the Senate Banking Committee was preparing to mark up the bill. Amendments introduced by Tillis sought to narrow the scope of rewards that crypto firms could offer on stablecoins.
US-based cryptocurrency exchange Coinbase later cited those proposed changes as one of several reasons it withdrew its support for the legislation at the time, underscoring how sensitive the yield issue has become for the industry.
While the Senate Agriculture Committee approved its portion of the CLARITY Act framework in January, the Banking Committee has yet to complete its markup — a necessary step before the bill can advance further.
Late-March CLARITY Act Markup
Terrett notes that a dramatic breakthrough between banks and crypto firms may be unlikely. Instead of a comprehensive resolution that fully satisfies both sides, the strategy now appears to focus on drafting language that represents the minimum each party can accept.
Even if Democrats ultimately oppose the bill during the next markup session, the CLARITY Act could theoretically pass out of committee along party lines. In that scenario, however, Tillis’ support would be pivotal if no Democrats cross the aisle. His position could determine whether the legislation advances or remains stuck.
At the same time, stakeholders involved in negotiations say the focus on stablecoin rewards has “taken a lot of oxygen out of the room,” leaving other contentious areas — particularly those related to decentralized finance — sidelined.
One DeFi executive engaged in the talks suggested that Senate Democrats are now scrambling to revisit those outstanding matters. Ethics provisions are also expected to remain a point of sensitivity for some Democratic members, adding another layer of complexity to an already delicate negotiation surrounding the CLARITY Act.
As the calendar advances, timing is becoming increasingly critical. One crypto trade executive said contingency options are being considered in case the Banking Committee’s markup slips further into the year.
Still, there is cautious optimism that meaningful progress on stablecoin yield and related provisions could be achieved within the next three weeks. If that happens, lawmakers may be able to reschedule the markup for late March.
Featured image from OpenArt, chart from TradingView.com
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