Crypto Legislation Delayed as Banking Lobbying Pushes Clarity Act to May

The Clarity Act, a comprehensive crypto market structure legislation in the U.S., has faced significant delays due to intense lobbying by banking trade groups. The bill's progress is crucial as it aims to clarify jurisdictional boundaries between regulatory agencies over digital assets and provide a clear legal framework for token classification, exchange registration, and custodian compliance.

The Senate Banking Committee had originally planned to deliberate and vote on the Clarity Act by the end of April. However, due to lobbying efforts from banking trade groups, the timeline has been pushed to May. The committee's chairman, Tim Scott, cited three unresolved issues: stablecoin yield provisions, DeFi-related clauses, and securing support from all Republican senators on the committee.

The core controversy centers around whether stablecoin issuers can pay yields to holders. A compromise reached in late March prohibited passive holding yields but allowed rewards based on on-chain activities. However, opposition from the banking sector intensified after a White House report downplayed the impact of stablecoin yields on the banking system.