Key Takeaways

  • Senator Thom Tillis has requested Senate Banking Chair Tim Scott postpone the CLARITY Act markup to May
  • Disagreement centers on stablecoin yield provisions and their treatment under the proposed legislation
  • Traditional banking institutions express concern about deposit migration to stablecoin platforms offering yield
  • The Digital Chamber advocacy organization calls for immediate legislative advancement
  • Senator Moreno indicated May represents a critical deadline for digital asset legislation passage

The CLARITY Act, a comprehensive crypto market structure bill under Senate consideration, will experience an additional postponement. North Carolina Republican Senator Thom Tillis informed reporters on Monday that the Senate Banking Committee should expect to address the bill in May rather than April. He formally requested Committee Chair Tim Scott adjust the markup schedule accordingly.

Tillis has emerged as a central figure in negotiations aimed at reconciling competing interests from banking and cryptocurrency sectors. Speaking with reporters, he emphasized the importance of providing adequate time for all stakeholders to present their perspectives before legislative action proceeds.

The legislation secured bipartisan approval from the full House nearly twelve months ago. Following that milestone, it successfully passed through the Senate Agriculture Committee. The Senate Banking Committee represents the next hurdle before the bill can advance to a complete Senate floor vote.

Stablecoin Rewards at the Center of Debate

The primary obstacle involves disagreement regarding stablecoin reward structures. Banking sector representatives have raised concerns about potential consequences if stablecoin issuers and platforms receive authorization to distribute yield to token holders. Their argument focuses on the risk of deposit outflows from conventional banking institutions, particularly smaller community banks.

According to banking industry analysis, these smaller institutions may lack the financial resources to manage substantial deposit withdrawals effectively.

Cryptocurrency companies, including Coinbase, have advocated for more accommodating provisions surrounding stablecoin rewards. Their position emphasizes that restrictive measures on rewards could stifle technological advancement and innovation.

According to the most recent draft language from last week, the legislation would prohibit rewards on dormant stablecoin holdings while permitting yield connected to active use such as transactions. A source informed The Block that modifying the text at this stage would present significant challenges.

Senators Tillis and Angela Alsobrooks, a Maryland Democrat, have collaborated on finding a resolution to this contentious issue.

Advocacy Groups Push for Progress

The Digital Chamber, representing cryptocurrency interests, delivered a letter Monday to Senate Banking Committee leadership requesting advancement of the legislation to markup “as soon as the calendar allows.”

CEO Cody Carbone signed the correspondence, which was directed to both Tim Scott and Elizabeth Warren, representing Republican and Democratic committee leadership respectively.

“More than 70 million Americans who have embraced digital assets deserve the regulatory clarity they have waited far too long for,” said Taylor Barr, the group’s government affairs director.

The Digital Chamber highlighted that over 270 days have elapsed since House passage of the bill.

US Treasury Secretary Scott Bessent has added urgency to the timeline. During March remarks, he cautioned that Democratic control of the House following November midterm elections could jeopardize the bill’s prospects.

Senator Bernie Moreno previously warned at the DC Blockchain Summit that if the bill did not pass by May, “digital asset legislation will not pass for the foreseeable future.”

This week, Senate Banking Committee proceedings will begin with Tuesday’s confirmation hearing for Kevin Warsh, President Trump’s nominee for Federal Reserve Chair.