CLARITY Act Faces Delay Risks Over Stablecoin Yield Disputes

Galaxy Research warns the CLARITY Act must reach the Senate by May to pass in 2026, as stablecoin yield debates and DeFi regulations stall progress.

According to Alex Thorn, Head of Research at Galaxy, the bill must be included on the full Senate agenda by early May to maintain a realistic chance of passage in 2026. Otherwise, the process could slow down significantly amid ongoing political disputes surrounding digital asset regulation.

The Dispute Over Stablecoin Yields

One of the primary issues facing the bill is the debate over the yield that can be offered on stablecoins. The banking sector warns that such mechanisms could drain deposits from the traditional financial system and create new risks for the stability of the banking system.

Thorn notes that many industry participants currently view this specific dispute as the main obstacle to the bill’s progress. The core question is whether rewards on stablecoins could undermine the traditional banking model, creating serious friction between the banking sector and crypto companies.

Potential New Obstacles for the Bill

Even if a compromise is reached on the stablecoin issue, it might not be enough to move the legislation forward. Alex Thorn warns that other contentious topics could quickly emerge as new hurdles in the legislative process.

These include the regulation of decentralized finance (DeFi), protections for blockchain software developers, and the question of how regulatory authority should be distributed among various agencies, including the Securities and Exchange Commission (SEC).

Market predictions already reflect this growing uncertainty. Data from Polymarket reveals that the probability of the CLARITY Act being signed into law in 2026 has dropped to approximately 56%, down from roughly 82% in February.

If the legislative process is delayed, it could prolong the period of regulatory uncertainty for crypto companies and investors who are waiting for a clearer framework for the digital asset market in the United States.

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