1. Hard Bipartisan Deadlock
During the Senate Banking Committee hearing on May 14, Democrats and Republicans still couldn't find common ground. Senator Lummis mentioned there's only a 1% gap remaining, but in reality, the amendment votes were highly partisan -- almost all Democratic amendments were shot down unilaterally.
2. 60 Votes Needed in the Senate โ Very Tough
To pass through the Senate, the CLARITY Act needs 60 votes - well above the simple majority. This means Republicans have to woo enough Democratic Senators to join in. Given the current partisan atmosphere, that's no easy feat.
3. Trump/Family Conflict of Interest Issues Not Resolved
Democrats โ including Senator Gillibrand โ firmly state that this bill will not pass the Senate without an ethics clause preventing senior government officials (read: Trump and his family) from profiting from the crypto industry. Negotiations on this are reportedly still tough.
4. Coinbase & Industry Once Withdraw Support
Coinbase CEO Brian Armstrong previously withdrew support from the CLARITY Act "as written," citing that this bill could potentially ban tokenized equities, restrict DeFi, expand government access to financial data, and eliminate stablecoin rewards. If the industry itself can turn back, that's a danger signal.
5. Stablecoin Yield Issues โ Banking vs Crypto
The banking industry is pushing for amendments that would prohibit exchanges from paying interest/yield to users holding stablecoins โ even if the platform isn't the issuer of those tokens. The crypto industry is strongly opposing this, and it's one of the reasons the markup was temporarily stalled.
6. Layered Legislative Process & Time Crunch
The Draft Banking Committee needs to clear committee first, then merge with the Agriculture Committee draft before it can hit the full Senate vote. After that, the Senate and House have to reconcile since their versions differ. (Latham & Watkins) Galaxy Research assesses the chance of the CLARITY Act being signed into law by 2026 at around 50-50 or lower โ because "there are still a lot of unresolved questions that need to be addressed sequentially under tight deadlines."
7. Midterm Elections Threat November 2026
If the CLARITY Act can't advance before the midterm elections in November 2026, this bill could die โ the next Congress will decide whether to continue with the existing version or start from scratch. This scenario creates massive uncertainty.
