Senate Republicans Push CLARITY Act Markup to May Amid Banking-Crypto Stablecoin Standoff

US Senator Thom Tillis is pumping the brakes on crypto market structure legislation, urging Senate Banking Chair Tim Scott to delay the CLARITY Act markup until May rather than push it through in April. The North Carolina Republican, who's been mediating between warring banking and crypto factions, wants more time to hash out the thorniest issue: stablecoin yield provisions.

Here's the tension: banking industry reps worry that allowing stablecoins to generate yield will trigger mass deposit migrations from traditional banks—especially smaller community banks without the balance sheet firepower to absorb sudden outflows without tapping expensive wholesale funding. Meanwhile, Coinbase CEO Brian Armstrong and the crypto lobby are fighting hard for more favorable stablecoin terms that don't leave money on the table for users.

"It's very important to me not to accelerate things, to hear everybody, and give them a rational basis for what we do accept," Tillis told reporters Monday, according to Punchbowl News. Translation: we're not rushing this, and both sides need to get properly heard.

The Clock is Ticking on Crypto Momentum

The delay calculus is becoming real. US Treasury Secretary Scott Bessent has already warned Congress that if Democrats retain House control after November's midterms, the CLARITY Act's prospects evaporate. "I think if the Democrats were to take the House, which is far from my best case, then the prospects of getting a deal done will just fall apart," Bessent said in March.

That's the underlying pressure here—crypto industry players know the regulatory window is closing. The Digital Chamber, a major crypto advocacy group, sent a direct letter to the Senate Banking Committee on the same day Tillis made his announcement, demanding the markup move forward "as soon as the calendar allows." They're not hiding their frustration: the House passed CLARITY with bipartisan support more than 270 days ago.

"Clarity cannot wait," Taylor Barr, The Digital Chamber's government affairs director, stated. "More than 70 million Americans who have embraced digital assets deserve the regulatory clarity they have waited far too long for."

Finding Middle Ground (Sort Of)

There's a sliver of compromise emerging. Banking and crypto representatives were reportedly close to a deal last month on enabling stablecoin rewards tied to crypto activity on third-party platforms—but explicitly NOT for passive balances sitting in wallets. That's a meaningful distinction the industry can work with, though obviously not everyone's thrilled.

Some crypto insiders are signaling pragmatism: getting something passed matters more than holding out for perfect terms. But with November looming and political dynamics potentially shifting, every month of delay cuts into the runway for getting this done.