US Senate Markup of CLARITY Act Delayed Amid Stablecoin Yield Dispute

The legislative timeline for the CLARITY Act, a pivotal crypto market structure bill, has faced a setback as Senator Thom Tillis (R-NC) urged Senate Banking Chair Tim Scott to delay the committee's markup until May. Tillis emphasized the importance of ensuring all stakeholders are heard, arguing against accelerating the process without a rational basis for the final provisions. The primary point of contention involves stablecoin yield. Traditional banking institutions have raised alarms that permitting such yields could trigger significant deposit outflows from the banking system, specifically threatening community banks that lack the balance-sheet flexibility to absorb such shifts without relying on expensive wholesale funding. Conversely, crypto industry leaders, including Coinbase CEO Brian Armstrong, have pushed for more favorable stablecoin terms. While recent discussions suggested a compromise—allowing rewards tied to active crypto platform usage rather than passive balances—a final agreement remains elusive. This delay has introduced political risk, with Treasury Secretary Scott Bessent warning that the bill's momentum could be lost if the US midterms in November result in a change of House control. The Digital Chamber, a crypto advocacy group, has urged the committee to move forward, noting that the House passed the legislation over 270 days ago and that 70 million Americans are awaiting regulatory clarity.