CLARITY Act's Passage Uncertain Amid Resolved Issues

The CLARITY Act, a comprehensive market structure legislation for digital assets, is facing significant challenges in the US Senate. Despite passing the House with strong bipartisan support, the bill's fate remains uncertain due to unresolved issues and time constraints.

A markup hearing is still pending, and a delay until May could significantly reduce its chances of becoming law this year. Several key issues remain unresolved, including stablecoin yield provisions, DeFi provisions, and securing votes from all Republican committee members.

The bill has been debated since January, with the Senate Banking Committee releasing a 278-page Manager's Amendment as the base negotiating text for the committee's work. The compromise on stablecoin rewards is still pending, and its language has not been made public.

While the crypto industry has expressed concerns about the bill's DeFi provisions, particularly the Blockchain Regulatory Certainty Act (BRCA), which clarifies that software developers and infrastructure providers who do not hold or control user funds are not money transmitters under the Bank Secrecy Act. Law enforcement and bipartisan pushback from the Senate Judiciary Committee have raised questions about its inclusion in federal law.