Senate’s Top Crypto Bill Is Stuck on Stablecoins and Housing. Here’s What’s Holding It Up

TLDR

• Senate Republicans met with White House crypto advisor Patrick Witt to work out stablecoin yield rules in the CLARITY Act
• Senator Cynthia Lummis is targeting an April committee markup, with year-end passage as the goal
• The stablecoin yield debate is close to a deal, but banks worry yield-bearing stablecoins could pull deposits away from traditional institutions
• Republicans are weighing linking the crypto bill to housing legislation to improve its chances of passing
• Democrats want a ban on lawmakers profiting from personal crypto holdings, and want CFTC seats filled before new rules are adopted

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Negotiations over the Digital Asset Market Clarity Act — the top crypto policy priority in the U.S. — are still ongoing, but lawmakers say they are making progress. Senate Banking Committee Republicans met Thursday in Washington with White House crypto advisor Patrick Witt to work through unresolved issues, including how stablecoin yield programs should be handled under the law.

https://twitter.com/BSCNews/status/2034513952130863404?s=20

The meeting included Senators Cynthia Lummis, Thom Tillis, and Tim Scott. Updated legislative text was expected to reach the White House on Thursday, though talks are still continuing.

Lummis said the negotiations are in a “delicate state” but that the meeting opened up new directions not previously considered. She said the focus has shifted from finalizing text to reaching out to stakeholders.

Stablecoin Yield at the Center of the Debate

The stablecoin yield question has been one of the hardest to resolve. Banks have raised concerns that stablecoins offering yields could pull deposits away from traditional financial institutions.

During Thursday’s closed session, senators pressed Witt to release a White House economic study on stablecoin yield and its impact on bank deposits. The report has reportedly been reviewed by lawmakers but has not been made public.

Lummis said stablecoin rewards programs that avoid language tied to savings accounts or interest payments may survive the final bill. She compared them to credit card rewards rather than bank interest.

Coinbase CEO Brian Armstrong, whose earlier opposition helped stall a previous version of the bill, has been more open to compromise in recent talks, according to Lummis. Coinbase did not respond to a request for comment.

Senator Tim Scott said on Tuesday at the DC Blockchain Summit that he expects a stablecoin yield proposal to be ready soon, and credited Lummis, Angela Alsobrooks, and Thom Tillis for moving negotiations forward.

Housing Bill Could Be Tied to Crypto Legislation

Senate Republicans are considering attaching community bank deregulation measures to the crypto bill as part of a deal to boost its chances of passing. This would link the CLARITY Act to housing legislation, combining two separate policy fights.

The Senate passed its own housing bill earlier this month, while House Republicans have their own version. Some senators believe merging the two issues could push both through.

It is unclear whether House Republicans would agree to such a trade.

Democrats also have conditions. They want senior government officials and lawmakers blocked from profiting off personal crypto holdings — a demand directed largely at President Trump. They also want the Democratic seats at the Commodity Futures Trading Commission filled before the agency begins writing new crypto rules.

Both of those points are expected to be the last issues resolved before a final bill can move to a full Senate vote.

The Securities and Exchange Commission has already begun moving on crypto policy. This week, the agency released its first-ever taxonomy of regulatory definitions for U.S. crypto assets. SEC Chairman Paul Atkins said the agency is ready to work with the CFTC to implement the CLARITY Act once Congress passes it.

Prediction market Polymarket currently gives the CLARITY Act a 62% chance of being signed into law in 2026.

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