Why the CLARITY Act Remains Delayed Despite Progress?

Key Insights:

• Banks say stablecoin yield rules in the CLARITY Act still have loopholes and risk deposit outflows.
• The dispute over the rewards program is delaying the bill’s final passage.
• Concerns grow that the bill may not pass before the November 2026 midterms.

The CLARITY Act has been progressing with rare bipartisan momentum. But the crypto bill is still not across the finish line.

Despite Senate agreement and an early legislative win, the market structure bill is still facing fresh delays. This uncertainty is mainly due to the unsettled debate on stablecoin yields.

Although Senators have recently agreed with the amended stablecoin proposal, banking groups are still against the rewards program.

Banking Groups Are Pushing Back on CLARITY Act

The much-awaited CLARITY Act is now in its pivotal phase, with many expecting its final passage this month. But uncertainty remains, as the banking industry is still not convinced by the stablecoin yield proposal.

In a recent X post, Fox Business journalist Eleanor Terrett shared insights on the current perspectives of the financial giants. The banks say that the latest Senate draft on stablecoin yield isn’t much different from the initial provision.

According to them, the revised draft still does little to protect the traditional financial system.

CLARITY Act News | Source: X

It is worth noting that the ongoing dispute between the crypto industry and banking giants put pressure on the CLARITY Act. As the debate goes on without any settlement, the crypto bill is expected to have further delays.

Why Banks Aren’t Convinced of the Stablecoin Draft?

In a joint statement, major industry bodies like the American Bankers Association and others asserted that they are not satisfied with how the bill currently handles stablecoin rewards.

While they agree that banning yield is the right goal, they argue that the current wording doesn’t fully achieve it and still leaves room for loopholes.

According to these groups, the draft could allow crypto platforms to offer returns that look similar to bank interest. But the major issue for them is that the stablecoin platforms do not come under the same banking regulations, while they follow similar interest schemes.

They warn that this could encourage people to move money out of banks into stablecoins. This may reduce lending to consumers and small businesses over time.

The banking groups are now planning to send more detailed suggestions to lawmakers in the coming days. However, with the bill already public, there are concerns that major changes may be difficult, keeping the debate unresolved for now.

However, it is worth noting that the banks have now stopped criticising the crypto bill sharply. This signals a more measured approach.

The main target of the group is Section 404. For them, the section leaves a loophole that could still offer bank-like rewards. They cited Andrew Nigrinis, who warned that a shift toward yield-bearing stablecoins could reduce lending to consumers, small businesses, and farms.

CLARITY Act Crypto Bill Timeline at Risk

As noted by Senate Banking Committee Chairman Tim Scott, the CLARITY Act is currently in the “red zone.”

He means that the crypto bill is moving closer to its final passage. His statement revealed that the bill is gearing up for a key markup hearing in May.

Following this critical statement, the odds of the CLARITY Act passage in 2026 soared past 60% for the first time in a month. It reached an impressive 69% last day, sparking optimism.

CLARITY Act Odds | Source: Polymarket

However, the ongoing dispute is sparking caution and uncertainty. The debate over stablecoin yield has become a major hurdle for the bill, even though it passed the House with strong support.

There are now concerns that it may not be approved before the November 2026 midterm elections, which could delay progress further.

The post Why the CLARITY Act Remains Delayed Despite Progress? appeared first on The Coin Republic.