Efforts to advance the long‑anticipated crypto market structure legislation, known as the CLARITY Act, are running into renewed headwinds as Washington’s attention gradually turns toward the 2026 midterm elections.
Despite ongoing discussions at the White House and behind‑the‑scenes negotiations among lawmakers, banking and crypto industry leaders, the bill remains stalled, with bipartisan consensus still out of reach.
Clock Ticks For Crypto Market Structure Bill
Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, cautioned that time is becoming a critical factor.
Speaking on Yahoo Finance’s Opening Bid, Witt urged policymakers not to lose momentum. “Let’s not let any moss grow here,” he said, warning that the opportunity to pass the legislation is “rapidly closing” as campaign season approaches.
Midterm election cycles, he noted, tend to dominate Capitol Hill’s agenda, leaving little room for complex policy debates. Witt emphasized that moving the bill forward will require flexibility from both the cryptocurrency sector and traditional financial institutions.
One of the primary sticking points centers on stablecoins and their potential impact on the banking system. Lawmakers, along with representatives from the banking industry, have raised concerns about a major drop in deposits from traditional banks if stablecoins are not subject to clear and appropriate regulations.
The issue of whether stablecoins should be permitted to offer yield has emerged as a particularly contentious obstacle, complicating efforts to secure enough votes for passage.
Coinbase CEO Sees ‘Win‑Win’ Path Forward
While recognizing the current challenges for the bill’s approval, Coinbase CEO Brian Armstrong expressed optimism that lawmakers could reach an agreement within months.
He told investors during the company’s earning call on Thursday that he is “quite optimistic” that some form of legislation will be approved “in the next few months,” pointing to what he described as a unified stance among major crypto companies.
Armstrong framed the situation as an opportunity to create balanced rules that benefit both financial institutions and digital asset firms. “There’s an opportunity to make a win‑win outcome here for everyone, for banks and crypto companies and the US citizen and everyone,” he said.
Despite the delays, Witt said the administration remains committed to refining the proposal and working with lawmakers on both sides of the aisle. The goal, he said, is to improve the legislation where necessary while preserving its core objectives.
In his view, the bill represents “a good product at the end of the day,” and the administration intends to keep pushing forward even as the political calendar grows more crowded.
Featured image from OpenArt, chart from TradingView.com
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