His remarks suggest that progress in the Senate could move at a slower pace, prolonging the uncertainty surrounding comprehensive crypto regulation in the U.S.

Clarity Act Unlikely to Pass Committee Before April

According to comments from Senate leadership, the Clarity Act is not expected to move through the Senate Banking Committee in the immediate term. Thune stated that it would be difficult for the proposal to clear the committee before April.

The Clarity Act is widely viewed as an important effort to define how digital assets should be regulated within the U.S. financial system. The legislation aims to clarify the legal status of cryptocurrencies, outline the responsibilities of market participants, and establish a clearer division of regulatory authority among government agencies.

While the bill has made progress in the House of Representatives, discussions in the Senate remain ongoing, highlighting the complexity of building consensus around digital asset regulation.

Senate Approves Housing Bill With CBDC Restriction

In a separate development, the Senate recently approved a comprehensive housing bill that includes a provision restricting the Federal Reserve from issuing a central bank digital currency (CBDC).

The legislation has now been sent to the House of Representatives for further consideration. The inclusion of the CBDC-related clause reflects the continuing political debate in the United States over whether the Federal Reserve should introduce a government-backed digital currency.

SAVE America Act Takes Legislative Priority

At the same time, another proposal has taken priority in the congressional agenda: the SAVE America Act. The Senate is expected to vote on the measure in the coming week.

The bill focuses on election procedures and would require individuals to provide official documentation proving citizenship when registering to vote. Former President Donald Trump has publicly supported the legislation and previously stated that he would not sign other bills until the measure is passed.

This prioritization of other legislative matters may also contribute to delays in advancing crypto-related regulation.

Ongoing Debate Over Stablecoins

Discussions surrounding digital asset regulation also extend to the stablecoin sector. One of the most debated issues involves whether stablecoin issuers should be allowed to offer yield-like returns to users.

Traditional banks argue that such practices could draw deposits away from the banking system while avoiding the regulatory requirements that banks must follow. On the other hand, some policymakers believe properly regulated stablecoins could actually strengthen the U.S. financial system.

Supporters of the latter view argue that compliant stablecoin frameworks may attract international capital into the American banking ecosystem rather than weakening it.

Regulatory Clarity Could Be a Major Catalyst

Despite uncertainty surrounding the legislative timeline, policy analysts generally agree that a comprehensive regulatory framework for digital assets could become a significant catalyst for the industry.

Clear rules may encourage greater participation from institutional investors and financial institutions that have so far remained cautious due to regulatory ambiguity. Increased institutional involvement could, in turn, bring more liquidity and long-term stability to the crypto market.

For now, the direction and timing of U.S. crypto regulation remain closely watched by both the digital asset industry and traditional financial institutions worldwide.

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Why the Clarity Act Matters

The Clarity Act passed the U.S. House of Representatives in July 2025 with bipartisan backing. However, as of January 2026, the bill is still under review in the Senate. The Senate Banking, Housing, and Urban Affairs Committee is leading the process, while the Senate Agriculture Committee is responsible for provisions related to the Commodity Futures Trading Commission (CFTC).

Although multiple hearings have taken place and draft frameworks around crypto market structure have been released, progress has been slow. Disagreements over investor protections, regulatory jurisdiction, and the division of authority between agencies have prevented alignment between the Senate’s drafts and the version approved by the House.

The Risk of a “Show Me” Era

Hougan warns that without the Clarity Act, today’s relatively constructive regulatory environment lacks durability. A future change in political leadership could easily reverse the current stance toward crypto.

In this scenario, the industry would enter what Hougan describes as a “show me” period—a phase where crypto can no longer rely on regulatory optimism and must instead prove its value through real-world adoption. Stablecoins, tokenized securities, and blockchain-based financial infrastructure would be expected to demonstrate tangible, large-scale utility to justify continued investor confidence.

Lessons from Uber and Airbnb

Hougan draws parallels to the early years of companies like Uber and Airbnb, which operated for years in regulatory gray zones. Their widespread adoption eventually forced policymakers to adapt. Crypto, he argues, may have to follow a similar path if legislative clarity fails.

However, the outcome is far from guaranteed. If crypto remains perceived as peripheral to the financial system after several years, a shift in political sentiment could result in significantly tighter restrictions. In such an environment, markets are unlikely to reward narratives without concrete usage data.

A Very Different Outcome If the Bill Passes

Should the Clarity Act pass in a form broadly acceptable to the industry, Hougan believes the market response could be immediate and forceful. Clear rules around stablecoins, tokenization, and broader crypto applications would likely unlock institutional participation and trigger a strong rally driven by regulatory certainty.

Rising Tensions Within the Industry

As the debate continues, internal fractures have become more visible. Citron Research has accused Coinbase CEO Brian Armstrong of opposing the Clarity Act to protect existing stablecoin revenue models. These claims followed Coinbase’s decision on January 14 to withdraw support for the bill, citing concerns around tokenized equities, DeFi privacy, stablecoin rewards, and expanding SEC authority.

Taken together, these developments highlight that the Clarity Act is more than a regulatory proposal—it represents a defining moment for the trajectory of the U.S. crypto market.

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Bipartisan Consensus Remains the Priority

Senate Agriculture Committee Chair John Boozman confirmed that the committee has intentionally slowed the legislative process to allow more time for cross-party negotiations. According to Boozman, while meaningful progress has already been made and discussions have been constructive, additional work is needed to finalize unresolved provisions and ensure the bill has sufficient political support.

As a result, the committee now plans to mark up the legislation during the final week of January. The bill had initially been scheduled for markup this week, aligning with a parallel review by the Senate Banking Committee.

Defining Regulatory Authority Over Crypto Markets

The delayed legislation is considered a cornerstone for US crypto regulation, as it seeks to clarify how oversight responsibilities will be divided between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). While the Senate Banking Committee oversees the SEC, the Agriculture Committee is responsible for the CFTC, making coordination between the two essential.

Unlike the House-passed CLARITY Act, which cleared the House of Representatives in July, the Senate version of the market structure bill is being advanced separately due to procedural requirements. Despite these differences, both efforts aim to bring regulatory clarity to an industry that has long operated under overlapping and often ambiguous rules.

Ethics Provisions and Stablecoin Yield Restrictions

Several contentious issues remain under negotiation. One major area of debate involves stablecoin yields. Bank lobbyists and some lawmakers are advocating for a complete ban on yield offerings, not only by stablecoin issuers but also by third-party platforms such as crypto exchanges. This push follows the GENIUS Act, which already restricted issuers from offering yield-bearing stablecoins.

Ethics provisions are another focal point. A group of Democratic senators is pressing for strict conflict-of-interest safeguards, including measures that would prevent public officials—President Donald Trump included—from financially benefiting from ties to crypto-related businesses.

Meanwhile, crypto advocacy groups are urging lawmakers to exclude software developers and non-custodial platforms from being classified as financial intermediaries, arguing that such entities should not be subject to traditional financial compliance rules.

Legislative Timeline Remains Uncertain on Crypto

According to investment bank TD Cowen, the approaching midterm elections could further complicate the bill’s passage by weakening political momentum. The firm suggests that approval may not occur before 2027, with full implementation potentially extending into 2029.

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The Rules Committee voted 8-4 along party lines to advance a rule governing debate on the bill. This procedural step allows the measure to reach the House floor on Wednesday. The Senate approved the bill on Monday with a 60-40 vote.

Bill Details and Amendment Requests

The committee rejected several amendments proposed by Democrats. These included extensions of expired health insurance subsidies and a provision allowing senators to sue law enforcement if they seize data. Members were warned that any changes could send the bill back to the Senate, further delaying the reopening.

House Speaker Mike Johnson called on lawmakers to return to Washington, D.C., ahead of the vote, noting that ongoing FAA restrictions could disrupt travel at major airports. With both chambers closed on Tuesday for Veterans Day, Wednesday is the earliest possible voting day.

Market Impact of the Government Reopening

This development follows several failed attempts to reach a funding agreement. The bill’s passage reflects bipartisan cooperation in the Senate. Experts say ending the shutdown could positively impact markets. For example, Sistine Research analysts called XRP the “fastest horse” to benefit from this rally.

Historically, ending U.S. government shutdowns has triggered gains in Bitcoin and other crypto assets. In 2019, Bitcoin rose 266% five months after a shutdown ended. Currently, Bitcoin trades around $103,000, down roughly 14% since the early October shutdown began.

Additionally, the U.S. Senate released a draft of the Crypto Asset Market Clarity Act, proposing to grant the CFTC more authority over digital assets. The government reopening and renewed liquidity could create favorable conditions for crypto markets.

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Arizona Senate Advances Bitcoin Reserve Bill

The Arizona Senate has advanced a Bitcoin reserve bill, placing it second in the race among U.S. states to pass a crypto investment bill, behind Utah.

On February 27, the Senate passed the Strategic Digital Assets Reserve Bill (SB 1373) on its third reading with a vote of 17 in favor and 12 against. The bill now heads to the state’s House of Representatives.

The bill, supported by Republican Senator Mark Finchem, proposes the creation of a “Digital Assets Strategic Reserve Fund” managed by the state treasurer. This fund will consist of money appropriated by lawmakers and crypto seized by the state.

The treasurer is limited to investing no more than 10% of the total fund deposits in any fiscal year but may loan digital assets from the fund to generate returns as long as it doesn’t increase financial risks to the state.

Satoshi Action Fund founder Dennis Porter, in a February 28 post on X, stated, “Whether you like it or not, federal-level legislation will happen in this order: Stablecoins, Market Structure, and Strategic Bitcoin Reserve.”

Another Bitcoin Reserve Bill Advances in Arizona Senate

Another Bitcoin reserve bill, the Strategic Bitcoin Reserve Act (SB 1025), has also passed its third reading in the Arizona Senate. Co-sponsored by Republican Senator Wendy Rogers and Representative Jeff Weninger, the bill passed on February 27 with a vote of 17 in favor and 11 against.

The bill supported by Rogers and Weninger focuses on granting public funds the authority to invest in crypto assets, while the bill supported by Finchem establishes a special fund for seized digital assets and appropriated funds.

Currently, 18 U.S. states have crypto reserve bills awaiting Senate votes, with only Arizona and Utah in the final stages of the approval process.

Crypto investment bills have been rejected in Montana, Wyoming, North Dakota, South Dakota, and Pennsylvania.

Bitcoin reserve proposals are gaining support across the U.S. due to President Donald Trump’s pro-crypto policies.

Meanwhile, Bitcoin has dropped by 17% over the past seven days, struggling to maintain gains amid economic uncertainty caused by Trump’s sweeping new tariffs.

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