The Digital Asset Market Clarity Act is entering its most critical phase yet, with Senate negotiators racing against a tightening legislative calendar to resolve the final sticking points before a July deadline.
At the heart of the dispute: whether stablecoins should be allowed to offer interest-like yields to holders and who gets to decide.
The bill is rapidly advancing from a legislative logjam toward high-stakes negotiations, with a tentative agreement between key senators and the White House having ended a three-month stalemate.
President Trump has added pressure by publicly calling on banking institutions to clear the path for the bill before the midterm election cycle heats up.
What the CLARITY Act Does
For the first time in US history, Congress is moving to establish comprehensive market structure legislation for cryptocurrency.
The bill would resolve long-standing jurisdictional tensions between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), while creating a regulatory framework intended to protect consumers and investors.
The lack of a unified framework has resulted in what many stakeholders describe as “regulation by enforcement.”
That dynamic has created legal uncertainty, constrained the participation of traditional financial institutions, and pushed innovation abroad.
The CLARITY Act would grant the CFTC exclusive jurisdiction over digital commodity spot markets, while maintaining SEC jurisdiction over investment contract assets.
The Stablecoin Yield Fight
The most contentious issue holding up the bill is stablecoin yield whether crypto firms should be permitted to offer rewards to users who hold stablecoins in their accounts.
The American Bankers Association has been lobbying to close what it sees as a yield loophole.
Meanwhile, senators at a recent industry summit said they are working toward a compromise to advance the bill.
The banks’ concern is straightforward. The GENIUS Act, the US’s first federal stablecoin law, passed in 2025 barred payment stablecoin issuers from paying interest to attract customers.
ABA President Rob Nichols has argued that unless crypto exchanges and affiliated companies are bound by the same restrictions, the result is a clear effort to evade congressional intent.
A recent closed Senate Republican meeting produced cautious optimism on stablecoin yield.
Senator Cynthia Lummis told reporters that negotiations are making progress but remain in a delicate state.
Her office later confirmed that stablecoin yield discussions are 99% of the way to resolution, and that the remaining friction is not technical, it is political.
A new complication has also emerged.
Senate Banking Republicans are now discussing attaching community bank deregulatory provisions to the CLARITY Act as part of a broader legislative deal drawing the bill into a wider political trade involving housing policy.
Broader Senate Divisions
Stablecoin yield is not the only unresolved issue. Senate Democrats have raised concerns about the decentralised finance (DeFi) sector posing vulnerabilities to bad actors.
They have also argued that Democrats should be appointed to vacant roles at the CFTC and SEC.
Possibly the most contentious of their requests is a ban on senior government officials profiting from personal crypto business ties, a pointed reference to President Trump.
There are procedural pressures too. To meet the July deadline before the August congressional recess, the Senate Banking Committee must conclude its markup by the end of April.
The CLARITY Act currently sits with the Senate Banking Committee, which has since released a competing discussion draft known as the Responsible Financial Innovation Act (RFIA).
The RFIA differs notably from the CLARITY Act by permitting the SEC to retain more discretion over digital assets.
