Crypto Market Structure Bill to Face Key Vote in April and Must Pass by May, Senators Say

After months of setbacks, a final plan is emerging from Senate Republicans to get a crypto market structure bill over the finish line before political momentum evaporates on Capitol Hill.

Cynthia Lummis (R-WY), the legislation’s chief champion in the Senate, said Wednesday the Senate Banking Committee will hold a rescheduled markup of the market structure bill, dubbed the Clarity Act, in “the second half of April.”

“We really are going to get it out of the Banking Committee in April,” Lummis said, during an appearance at the DC Blockchain Summit.

Shortly thereafter, speaking in a video message at the same event, Lummis’ pro-crypto Senate Banking colleague Bernie Moreno (R-OH) struck a more somber tone.

“If we don’t get the Clarity Act passed by May, digital asset legislation will not pass for the foreseeable future,” Moreno said.

Taken together, the statements reveal the strategy behind what could be the Senate’s final window to pass a major crypto bill before the upcoming midterm elections grind Congress to a halt.

The Clarity Act, if passed and signed into law, would formally legalize most crypto activity in the United States, including the initial sale of crypto tokens to U.S. residents in what were previously called ICOs. It would therefore prevent a future presidential administration from attempting to limit or ban such activity without undoing the legislation.

There are only two weeks in the second half of April the Senate will be in session: the weeks of April 13 and April 20. Should the bill pass a Senate Banking committee vote in that period, it would then need to be combined and reconciled with the parts of the bill narrowly passed by the Senate Agriculture Committee in January.

That will be no small feat. Zero Democrats on the Committee voted for the bill, citing Republicans’ refusal to compromise on key issues. Sen. Kirsten Gillibrand (D-NY), the most vocal pro-crypto Democrat in the Senate, said Wednesday that the Agriculture portion of the bill will need to be substantially rewritten to receive bipartisan support.

From there, the bill would have just three weeks in May to secure floor time, win the support of Democrats, and pass multiple essential votes. Congress shuts down for a Memorial Day recess on May 21. Moreno said Wednesday that attempts to pass a crypto bill after that point will likely be unsuccessful.

Several hurdles must be overcome to get the Clarity Act passed by then. Chief among them is an ongoing dispute between crypto firms and the banking industry over stablecoin yield—rewards paid to holders of crypto tokens pegged to the value of the dollar. These rewards, essentially a form of interest payments to stablecoin holders, would make it difficult for smaller banks to compete for consumer deposits, banking lobbyists say.

Senate Banking chair Tim Scott (R-SC) said Tuesday he expects to see a potential compromise on stablecoin yield language in the Clarity Act this week. Lummis said today she too is optimistic the new language could mark a step forward after months of largely unproductive talks between banks and crypto. Lummis said, though, she had not seen the new language herself.

Banking Committee members Thom Tillis (R-NC) and Angela Alsobrooks (D-MD), who have voiced concerns over the impact stablecoin yield could have on the banking industry, are currently negotiating directly with the White House on the issue.

But even if the stablecoin yield issue is solved, several others remain.

Those include decentralized finance, or DeFi—financial applications that exist natively on blockchain networks and circumvent the need for third-party intermediaries like banks. Many industry stakeholders have said they would walk away from the bill if Senate Democrats made good on demands, largely related to national security concerns, to undo carve outs in the bill for DeFi projects and platforms.

They also include the thorny issue of the Trump family’s numerous crypto businesses, including a stablecoin venture with World Liberty Finance. Several key Senate Democrats have insisted the businesses must be outlawed by the crypto bill, but the White House has considered such restrictions to be a non-starter.

Despite expressing optimism that the Clarity Act could soon pass, Sen. Gillibrand reiterated her insistence Wednesday on strong ethics provisions in the bill.

“I think it is essential that members of Congress and any senior member of the administration, including the president and the vice president, are not issuers of cryptocurrencies or stablecoins, or promoters, that they’re not huckster selling things,” Gillibrand said, speaking at the DC Blockchain Summit.

“We undermine the legitimacy of our government if people are getting rich off the backs of their positions,” she added.