Will Clarity Act pass soon as crypto, banks near key deal?

The Clarity Act, which passed the House of Representatives into law in July 2025, has been stalled for nearly nine months as the crypto industry and Bankers continue to negotiate over the economics and regulatory oversight of stablecoins.

However, new information suggests that after months of deadlock, both groups may finally be closing the gap, and a landmark compromise may be officially on the table ahead of the Senate's April markup.

What is the Clarity Act?

The Digital Asset Market Clarity Act  (H.R. 3633), commonly referred to as the CLARITY Act, is the legislative answer to regulatory uncertainty and seeks to clarify which federal agencies oversee specific digital assets, including stablecoins, digital commodities, and crypto securities.

Outlined within the bill are provisions that categorise digital assets into three distinct categories.

Digital assets that operate on functional, decentralised blockchains, such as Bitcoin or Ethereum, would fall under the exclusive jurisdiction of the Commodity Futures Trading Commission as digital commodities. This classification moves them away from the more restrictive framework typically applied under securities laws.

Meanwhile, tokens sold specifically to raise capital for a centralised project, like an Initial Coin Offering or ICO, remain under SEC jurisdiction until the network is proven to be sufficiently decentralised. 

However, the key dispute remains centered around a specialised set of rules for stablecoins, specifically regarding reserve transparency and yield-bearing features, which has become the main sticking point that has delayed the full Senate vote.

Crypto industry proponents claim that prohibiting stablecoin rewards will stifle innovation and push users toward offshore platforms, while Bankers argue that unregulated "shadow banking" yields pose systemic risks to traditional deposit bases.

To resolve this, both industry leaders and Senate staffers have had several intense closed-door meetings in early 2026, which have yielded little progress until now. 

As a result, the bill has been delayed since January 2026, when Senate Banking Committee Chairman Tim Scott initially postponed the markup to address over 130 proposed modifications.

Coinbase exec says finalisation may be near

Coinbase was one of the biggest advocates and negotiators in this debate and has been advocating for a framework that allows for activity-based rewards.

In a recent interview with Fox Business, Coinbase’s Chief Legal Officer Paul Grewal said that both groups are "very close to a deal," and a breakthrough could happen very soon, potentially within the next 48 hours. 

As such, he suggested that a markup hearing could happen within the coming weeks. 

When will the Clarity Act be passed?

According to analysts at firms like JP Morgan, based on the recent optimistic comments from Grewal, if the Senate Banking Committee successfully marks up the bill in April, the Clarity Act could clear the Senate by early summer 2026.

Which means if the President signs it shortly thereafter, it could become law by the third quarter of 2026, as long as banks and the crypto lobby come to a final consensus on the yield language.

Last month, President Donald Trump publicly urged banks and lawmakers to pass crypto market structure legislation to ensure the US remains the global leader in digital finance.

However, if negotiations over stablecoin interest don't end up finding common ground or the April markup deadline is missed, it could delay the legislation until after the 2026 midterm elections.

On Polymarket, the odds of the CLARITY Act passing by the end of 2026 currently sit at approximately 68%. Odds have improved significantly over the past 48 hours following Grewal’s comments.

Upon passage, market watchers believe the crypto market will see a massive influx of institutional capital, which could help support a sustained bull market in the long term.