The window to pass the most important crypto legislation in US history is closing fast. If Congress can’t pass the CLARITY Act by late April, the effort is likely dead until after the midterm elections. For retail investors, this means another year of speculating about which tokens the SEC might prosecute next.
Advocates are currently stuck on one issue, in particular: how much stablecoins are allowed to pay you. It is a technological war with huge consequences.
(SOURCE: TradingView)
If lawmakers miss this spring window, the bill becomes a victim of the election cycle, leaving the industry stuck in regulation forever.
This latest update to the CLARITY Act comes as the crypto market is down in the last 24 hours, with a market cap of over $2.6 billion and $91Bn in daily trading volume.
CLEAR Rule Review: The Section 404 Approach
TODAY: Senate Banking Committee meets on CLEAR Act
Legal clarity is getting closer…
And when that clarity is achieved, XRP will be a very profitable asset. And a big bull cycle will start for all cryptocurrencies.
Mega bullpic.twitter.com/3zR5Au672k
– Bitcoin Prof (@Bitcoinprof0637) March 17, 2026
The CLARITY Act is the last attempt to decide who is in charge of the crypto show: the Commodities Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC).
These organizations have been involved in a turf war for years. The CLARITY Act would give the CFTC exclusive jurisdiction over local “digital asset” markets. This is important because the CFTC is generally considered a more effective regulator than the enforcement-heavy SEC.
But the entire bill is stalled because of one specific clause: Section 404. This section deals with “stablecoin yields.” To understand the fight, you have to look at it from a banker’s point of view.
When a stablecoin producer like Circle or Tether holds your dollars and pays you 5% interest (or “rewards”), they effectively work like a savings account. But unlike a bank, they don’t have to pay expensive FDIC insurance or comply with strict capital requirements.
The approach in the current draft of the bill is wrong. Section 404 attempts to distinguish between “interest” and “fiduciary benefits.” The banking lobby argues that this is a loophole that allows crypto companies to eat their lunch.
GET: The Next 1000 Crypto Gem before It Lists on Exchange
Central Deadline: Why the Clock Matters
In Washington, DC, the calendar is the enemy. We don’t just wait for the text to be updated. We are running into campaign season. Political analysts see late April or early May as a strong cutoff. Here’s why:
As summer begins, lawmakers leave Washington to campaign for the midterm elections. Legal work stops. Controversial debt, and crypto is definitely controversial, is the first to be left out. A bill that does not pass the Senate Banking Committee in May is dead until the next Congress meets in 2027.
There is a slight chance of a “lame duck” session after the November election, but counting on that is a gamble. The current Senate draft of the CLARITY Act has stalled once. If negotiations between bank lobbyists and crypto advocates do not produce consensus in the next few weeks, the momentum will dissipate.
Who’s Fighting for This and What’s Next
After seeing $CRCL and a bunch of other crypto stocks pumped for a while on the CLARITY Act news, I couldn’t help but share my thoughts. Everyone wants a piece of the pie in this stablecoin world! A major breakthrough is Section 404 of the CLARITY Act: it finally bans passive…
– IU C
T (@shihchiehlee) March 17, 2026
Battle lines are being drawn between traditional currencies and the crypto industry, with Congress caught in the middle.
On the other hand, you have a bank entrance. They say if it looks like a bank account and pays interest like one, it should be regulated as one. They want Section 404 to strictly prohibit stablecoin issuers from paying yields.
On the other hand, issuers of stablecoins and DeFi protocols argue that the “rewards” of holding or holding are very different from bank interest. They warn that restricting the harvest will push restarts further offshore, leaving the US behind.
Leaders of the Senate Banking Committee are trying to find a middle ground where intermediaries (such as exchanges) can handle the rewards rather than issuing them directly. But the Congressional Research Service notes that the current draft leaves the definition of “owner” too vague to satisfy banks.
We are looking at a committee marking program in mid-April. If that day passes without a hearing, you might think the CLARITY Act is being shut down until after the election. The bill needs to move now, or it doesn’t move at all.
FIND: Top Crypto Presales to watch now
Follow 99Bitcoins on X (Twitter) For the latest market updates and subscribe to YouTube For Daily Expert Market Analysis.
The post Congress Faces Deadline to Advance Crypto CLARITY Act Before Midterms appeared first on 99Bitcoins.
