Clock is Ticking for CLARITY Act as Senators Look to Sacrifice Stablecoin Yield

Lawmakers are still searching for a compromise to revive the stalled CLARITY Act, the United States’ flagship crypto market structure bill. Senators are now exploring a potential middle ground on stablecoin yield rules after negotiations hit a new impasse earlier this month.

Last week, banks reportedly rejected a White House-backed proposal aimed at breaking the deadlock over stablecoin rewards. They still dont want any product that would compete with traditional banking deposits. 

That rejection has kept the bill stuck in the Senate and raised fresh questions about whether Congress can pass the legislation before the 2026 midterm elections. The clock is now becoming a central factor.

Negotiations Continue, But The Bill Remains Stuck

The CLARITY Act passed the House in July 2025 with bipartisan support. After passing the House, the legislation moved to the Senate Banking Committee. There it has stalled.

The main dispute is now stablecoin yield. Banks argue that allowing stablecoins to generate interest or rewards could pull deposits away from the traditional banking system. 

Crypto firms say rewards are a normal part of digital asset markets and should not be banned outright.

Because negotiators have not resolved that issue, the Senate has not scheduled a committee markup. Without that step, the bill cannot move to the Senate floor.

Meanwhile, senators are still trying to craft compromise language. 

Some proposals would allow limited stablecoin rewards for payments or transactions while restricting interest on idle balances. Yet banks remain skeptical of any structure that resembles a deposit-like yield.

As a result, negotiations are continuing, but progress remains slow.

The Clock Before the Midterms

The bigger challenge is timing.

Congress must pass the bill before the November 2026 midterm elections if lawmakers want it to become law in this session. But the congressional calendar leaves only a few realistic opportunities.

In practice, there are three windows left.

Window One: Spring (March–May)

The first and strongest window is happening now.

If negotiators resolve the stablecoin yield dispute in the coming weeks, the Senate Banking Committee could schedule a markup and advance the bill in late March or April. From there, the Senate could move to a floor vote before the end of spring.

This is the best chance for the CLARITY Act to move quickly.

However, the Senate calendar already includes several recess periods in late March and May. 

It is scheduled to be out from March 30 to April 10, and again from May 4 to May 8, and from May 25 to May 29. 

That means the practical time for a markup, Senate passage, and House-Senate cleanup is really concentrated in the next 8 to 10 weeks.

Window Two: Early Summer (June–July)

There is still time after Memorial Day, but it gets harder. 

Reuters reported that Senate floor time is limited before lawmakers leave Washington in the summer to start campaigning for the midterms. This is a major constraint for a bill that still has unresolved fights over yield, ethics, and illicit-finance language. 

The Senate is also out from June 29 to July 10, which compresses this period further. 

In addition, if the Senate passes a version of the bill different from the House text, lawmakers would still need to reconcile the two versions before sending it to the president.

That extra step could further slow progress.

Window Three: September

This is the last realistic pre-election shot, but it is weak. 

The Senate is scheduled to be out from August 10 to September 11, and then again from October 5 to November 6, which effectively takes October off the table. 

That leaves only a narrow September stretch if leaders decide the bill is urgent enough to force through.

In practice, however, this window is narrow and politically difficult. Major legislation rarely moves close to an election unless leaders consider it urgent.