Cryptocurrency Regulation Reaches a Turning Point: In-Depth Analysis of the Latest Developments and Industry Impact of the CLARITY Act

On April 13, 2026, after the U.S. Senate concluded its Easter recess and resumed full session, the “Digital Asset Market Clarity Act” (CLARITY Act) officially entered the final sprint of the legislative process. The Senate Banking Committee is targeting late April, and the physical constraints of the legislative clock have already become apparent: from committee review to the presidential signing, the five-step process must be completed in under two months.

Meanwhile, on April 10, Coinbase CEO Brian Armstrong publicly supported the bill, completing a 180-degree turnaround in stance and echoing the pressure moves by Treasury Secretary Scott Bessent, providing a key endorsement for the bill. A compromise package centered on Senators Thom Tillis and Angela Alsobrooks is circulating among industry stakeholders for review. A comprehensive regulatory framework for U.S. digital assets seems to have finally reached a critical breakthrough point.

What exactly has the compromise plan compromised on?

The issue of stablecoin yield was the core obstacle that caused the CLARITY Act to be stalled in the Senate for nearly a year. The banking industry strongly opposed crypto platforms offering stablecoin yields, worrying that such products could trigger systemic deposit outflows, while the crypto industry insisted that yield mechanisms are a necessary condition for competition and innovation. The core logic of the Tillis-Alsobrooks compromise framework lies in cutting through the distinction between “passive yields” and “active rewards”: it bans crypto platforms from paying interest solely on simply holding stablecoin balances, but explicitly allows activity incentives and rewards plans that are tied to payment behavior and platform usage. This means stablecoin holders can still earn rewards through real actions such as participating in trading and making transfers, but they cannot receive automatic yields similar to interest on bank deposits. This distinction provides a basis for political progress: the banking industry’s core concern about deposit outflows is addressed, while space for crypto innovation is preserved.

How will the White House research shake up the power struggle?

The implementation of the compromise package was not accidental. A formal analysis report released by the White House Council of Economic Advisers on April 8 directly challenged the banking industry’s core arguments against the bill with empirical evidence. The report calculates that allowing stablecoin yields would only create an estimated displacement effect on bank loans of about $2.1 billion, or roughly 0.02% of the total outstanding loan amount—far from the level of systemic deposit outflow that banking lobby groups warned about. The report further points out that a complete ban on passive yields would cost consumers about $800 million in returns each year, and the actual protection effect for bank deposit stability would be very limited. This White House-level administrative intervention, grounded in empirical evidence, weakens the case of the banking opposition and provides political cover for the compromise package, directly helping to loosen the legislative deadlock.

Why did Armstrong go from a roadblock to an endorser?

Brian Armstrong’s public remarks on April 10 marked a 180-degree shift in his personal stance within three months. In January, just before the scheduled markup in the Senate Banking Committee, he posted two messages saying Coinbase could not support the bill version at the time, which directly led the committee to delay its review. Now, he publicly responded to Treasury Secretary Scott Bessent on the X platform, saying, “Now is the time to pass the CLARITY Act.” Factors driving this change include the retention of the “activity rewards” clause in the compromise package, the political impact of the White House Council of Economic Advisers’ report, and Coinbase’s own business considerations—market estimates suggest that revenue related to stablecoins accounts for about 20% of Coinbase’s total revenue. By confirming that there is room to retain the activity incentive clauses, the compromise package enables its revenue model to continue within a compliant framework, which constitutes the core business logic behind its stance shift.

Why is the legislative clock so tight?

After the Senate concluded its Easter recess and resumed full session on April 13, the legislative process has entered a high-speed countdown. Before the bill can be formally signed into law, it must be completed in sequence: Banking Committee markup, a full Senate vote of 60, coordination with the version from the Agriculture Committee, coordination with the House version from July 2025, and finally delivery for presidential signing. Alex Thorn, head of Galaxy Research, explicitly warned that if the bill cannot pass committee review in April, the probability of completing the legislation within 2026 would drop sharply to “extremely low.” Senator Bernie Moreno has also publicly warned that missing the May window may result in the legislation being excluded from the remaining congressional agenda for the rest of this year. With the five-step process needing to be completed entirely in under two months, the time constraint is extremely strict. Senate Banking Committee Chair Tim Scott controls the markup schedule, and late April will be the key turning point that determines the bill’s fate.

What kind of new shift will institutional capital and asset valuations face?

The legislative outcome of the CLARITY Act will have a direct two-sided impact on institutional capital allocation and the valuation of crypto assets. Taking XRP as an example, the bill will formally define it as a digital commodity under U.S. law, providing large-scale regulatory certainty for banks and major asset managers. Standard Chartered analysts predict that the Senate Banking Committee’s advancement could release an additional $4 to $8 billion in XRP ETF funding inflows. For stablecoin issuers, the final wording of the yield clauses will directly affect valuation pricing: if the Tillis-Alsobrooks framework is ultimately written into law, Circle can maintain a rewards ecosystem based on USDC usage within a compliant framework, and the reserve interest income generated by the USDC market value of over $70 billion can be partially transmitted in the form of activity incentives. Conversely, if in the final stage the banking industry successfully narrows the definitional scope of “activity incentives,” the revenue structure of stablecoin issuers will face direct compression. Market prediction platform Polymarket shows that traders estimate the probability that the CLARITY Act will be signed into law in 2026 at about 63%, reflecting the market’s cautious attitude toward the fine details of the compromise package.

Summary

The CLARITY Act has crossed the most critical deadlock stage in the legislative process. By distinguishing between “passive yields” and “activity rewards,” the Tillis-Alsobrooks compromise plan has opened up a feasible balancing point between the banking industry and the crypto industry. Coinbase CEO Brian Armstrong’s shift in stance signals that major industry participants have reached consensus on the compromise package. The White House Council of Economic Advisers’ research empirically weakens the banking industry’s opposition arguments, providing political cover for legislative advancement. However, the late-April committee markup is only the first step in a long legislative chain; subsequent steps—full Senate approval of 60 votes, coordination between the two chambers’ versions, and presidential signing—still need to be completed within an extremely short timeframe. For the crypto industry, passage of the CLARITY Act will put an end to the long-standing regulatory ambiguity that has troubled the market, clarify the jurisdictional boundaries between the SEC and the CFTC, and remove legal obstacles for large-scale institutional capital to enter. The final outcome will ultimately depend on the key votes in late April.

Frequently Asked Questions (FAQ)

Q: What is the difference between the CLARITY Act and the GENIUS Act?

The GENIUS Act (signed into effect in July 2025) mainly targets the regulatory framework for stablecoin issuers, requiring issuers to maintain 1:1 reserve assets and prohibiting issuers from passing yields to holders. The CLARITY Act is a broader digital asset market structure bill, covering wider areas such as asset classification (securities vs commodities), exchange regulation, and the division of jurisdiction between the SEC and the CFTC.

Q: How does the compromise package for stablecoin yield clauses work in practice?

The core logic of the compromise package is to prohibit “passive yields” (automatic interest that accrues simply from holding stablecoin balances), but allow “activity-based rewards” (incentives linked to users’ actual behaviors, such as trading rebates, payment rewards, transfer incentives, loyalty programs, etc.). This design is intended to balance the banking industry’s concerns about deposit outflows with the crypto industry’s need for competitive space.

Q: If the bill fails to pass committee review in April, is there still a chance afterward?

Based on Alex Thorn’s assessment at Galaxy Research, if the bill cannot pass the Banking Committee markup in April, the probability of completing the legislation within 2026 would drop sharply to “extremely low.” Senator Bernie Moreno has also warned that missing the May window could mean the legislation is excluded from the congressional agenda for the remainder of this year. Procedural constraints are very strict, making late April a critical decision window.

Q: How will the passage of the CLARITY Act affect the regulatory positioning of mainstream cryptocurrencies?

The bill aims to clarify the responsibilities of the SEC and the CFTC in digital asset regulation. Major crypto assets such as Bitcoin, Ethereum, Solana, and XRP are expected to be classified as “digital commodities,” to be regulated by the CFTC, thereby gaining clear legal status and providing regulatory certainty for large-scale allocations by banks and major asset managers.

Q: Why does the probability predicted by Polymarket fluctuate around 63%?

The probability from the prediction market reflects the market’s cautious stance toward the details of the compromise package. Although the Tillis-Alsobrooks framework has reached agreement in principle, the struggle between the banking and crypto industries over the definition of “activity incentives” is still ongoing. Polymarket data rose to 82% in February and then fell back to around 56%. The current figure of about 63% reflects cautiously optimistic expectations for final passage.