CLARITY Act Faces Midterm Clock as Congress Races to Win Over Banks

Congress has only a short stretch of calendar left to move the CLARITY Act from Senate committee limbo to a floor vote, and the biggest obstacle is still the banking lobby. If lawmakers cannot narrow that fight in the next few weeks, the bill risks sliding into the 2026 midterm crunch, where even broad bipartisan support may not be enough to save it.

The CLARITY Act is the main U.S. market structure bill for digital assets. It would draw clearer lines between the Securities and Exchange Commission and the Commodity Futures Trading Commission, while also adding disclosure rules, insider abuse limits, protections for software developers, and new law enforcement tools, according to the Senate Banking Committee majority’s fact sheet.

That matters for regular crypto users because the bill is meant to answer a basic question that still confuses the U.S. market: which tokens fall under securities rules, and which do not. Without that answer, exchanges, token issuers, and app developers still operate under a patchwork that can change through lawsuits or agency actions instead of clear legislation.

How little time Congress actually has left

The House already passed the CLARITY Act by a 294 to 134 vote on July 17, 2025. In the Senate, the bill sits with the Banking Committee, which released fact sheets for a markup push on January 13, 2026 before the planned January 14 session was postponed after more than 100 amendments were filed.

The next attempt is expected in mid to late March 2026, based on the verified research brief. Senate Majority Leader John Thune has also signaled that he does not expect the bill to clear committee before April 2026, which means the real window is already compressing into late spring and early summer.

That is the part many headlines miss. The practical Senate floor window for a divisive bill closes well before November because controversial votes usually get harder as members turn toward the midterm campaign season, and this brief points to August 2026 as the effective cutoff.

If the bill is still stuck by the end of April, the odds get materially worse because the committee delay starts eating into the floor calendar. If it fails to pass before the next Congress is seated in January 2027, the entire measure dies and must be reintroduced from scratch under a new political map.

Why banks are still not on board

The central dispute is stablecoin yield. Banks do not want stablecoin issuers or crypto platforms to offer returns on dollar-linked tokens in a way that looks and feels like an interest-bearing bank deposit, because they argue that would pull deposits out of the traditional system.

That fear is not abstract. The research brief says banks frame the risk as potential “deposit flight” from the roughly $23 trillion U.S. lending sector, which would affect how banks fund loans in local communities as well as at the national level.

The American Bankers Association hardened its stance on March 5, 2026, when it formally rejected a White House brokered compromise. DL News reported that ABA chair-elect Cathy Owen warned, “It would be extremely detrimental should our deposits be cut back, especially in our rural and local communities.”

That rejection mattered because it came after the White House had reportedly set a March 1 deadline for a deal. The same brief says the White House then accused banks of “hijacking” the broader crypto market structure push, showing how a single unresolved banking issue is now threatening the whole package.

Lawmakers are trying to split that opposition. CoinDesk reported that Senators Angela Alsobrooks and Thom Tillis are leading talks on a compromise, with Alsobrooks saying, “We’re going to probably have to make some compromises. Everyone should be prepared to leave a little unhappy.”

There are also signs that trade groups and individual banks are not perfectly aligned. CoinDesk separately reported that Coinbase CEO Brian Armstrong blamed banking trade groups more than banks themselves, arguing that some banks see crypto as a business opportunity rather than a threat.

Even JPMorgan Chase CEO Jamie Dimon appears to have left a small opening. In the same March 10 CoinDesk report, he said transaction-based rewards could be acceptable, which suggests Congress may still be able to craft a narrower concession that stops short of full interest on stablecoin balances.

What a midterm wipeout would mean for crypto regulation

If the CLARITY Act slips into the post-election reset, the immediate result is simple: no new statutory map for the U.S. crypto market. The SEC and CFTC would keep operating in the same gray area that has defined the sector for years, and companies would keep making product, listing, and compliance decisions without a settled federal framework.

For ordinary holders, that does not mean crypto disappears. It means the rules around which assets can trade where, how platforms register, and what disclosures users get would stay less predictable than the industry wants.

The broader political risk is that the midterms could change who controls the Senate. If Republicans lose the chamber in November 2026, the bill’s coalition, committee priorities, and negotiating leverage all change at once, even though the House passed it with a wide bipartisan margin.

There are fallback tools, but they are weaker. DL News reported former SEC senior counsel Ashley Ebersole saying, “The president has a lot of levers that can be pulled,” but executive action or agency rulemaking can be narrower, slower to settle, and easier for a later administration to reverse.

The pressure point now is not whether Congress can write a crypto bill. It already did that in the House. The pressure point is whether senators can convince enough of the banking sector, or at least blunt its opposition, before a delayed markup turns into a lost year.

The next signal is the committee’s second markup attempt later in March 2026. If that meeting happens and produces a committee-approved bill, the CLARITY Act still has a path. If it slips again, the story stops being about crypto policy design and starts being about calendar math.

Disclaimer: This article is for informational purposes only and does not constitute financial or legal advice.

Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency and digital asset markets carry significant risk. Always do your own research before making decisions.