Clarity Act In-Depth Analysis: Pushback and the Five Major Structural Barriers

April 22, 2026, the Washington research team under investment bank TD Cowen released an analysis report on the prospects for U.S. cryptocurrency market-structure legislation. In the report, Managing Director Jaret Seiberg pointed out that the controversy over stablecoin yield terms is not the only problem facing current legislation— for the Digital Assets Market Clarity Act (Clarity Act, also known as the CLARITY Act) to smoothly pass through Congress, it still needs to overcome five additional structural hurdles.

These five obstacles are: severe understaffing at the U.S. Commodity Futures Trading Commission, the possibility that prediction market regulatory issues could be forcibly folded into the bill, the continuing political controversy surrounding the Trump family crypto project World Liberty Financial, the anti-money-laundering pressure arising from Iran’s imposition of crypto tolls in the Strait of Hormuz, and the risk that the Credit Card Competition Act will be bundled into legislation.

Seiberg reiterated his earlier judgment in the report, saying that the probability of the bill being passed within 2026 is about one-third. At the same time, Galaxy Digital offered a more optimistic assessment, believing the passage probability is about 50%, while also admitting that the bill faces “a large number of unresolved issues that need to be addressed sequentially under extreme time pressure.”

From a high-vote passage in the House to a Senate deadlock

The core goal of the CLARITY Act is to establish a unified federal regulatory framework for digital assets in the United States. The bill was passed in the House of Representatives in July 2025 by a vote of 294 in favor and 134 against. All 216 Republican members who participated in the vote cast their votes in favor, and an additional 78 Democratic members supported it across party lines, reflecting a rare bipartisan consensus. After that, the bill was sent to the Senate and, starting in January 2026, entered a period of intensive consideration and negotiation by the Senate Banking Committee.

However, the legislative process has not gone smoothly. In January 2026, the Senate Banking Committee temporarily announced that it would delay its review of the bill, citing issues involving the controversy over stablecoin yield terms. Since then, negotiations over whether stablecoin platforms can provide yield returns to users have repeatedly oscillated between the banking industry and the crypto industry. At the end of March, Senators Thom Tillis and Angela Alsobrooks reached a compromise proposal: to ban platforms from offering passive yield on stablecoin balances, but to allow active rewards when stablecoins are used for payment, transfers, and other scenarios. Although the crypto industry broadly accepted this proposal, the banking industry continued to apply pressure.

As of April 22, Senator Tillis told the media outlet Politico that the Senate Banking Committee would vote on the bill at the earliest in May, and that the final text of the stablecoin yield terms would most likely be released only on the eve of the vote. TD Cowen’s analysis suggests that the bill must complete key actions before the end of July in order to make substantial progress before the August congressional summer recess, otherwise the legislative window will narrow sharply.

In-depth breakdown: examining the five structural difficulties one by one

Regulatory agency vacancy: the CFTC has only one commissioner remaining

The U.S. Commodity Futures Trading Commission is currently operating in a highly abnormal state. The agency’s statutory structure is a five-person commission, which typically includes commissioners from two parties jointly making decisions. But since Michael Selig became Chairman in December 2025, the remaining four commissioner seats have all been vacant, meaning the CFTC currently has only one commissioner performing all decision-making functions.

This situation directly affects the bill’s feasibility. If the CLARITY Act is passed, it would grant the CFTC a large number of new responsibilities for regulating digital asset markets, including oversight authority over digital commodity brokers, exchanges, and custodians. However, with only a single commissioner, it is politically difficult to reassure Congress about handing such a significant expansion of powers to the CFTC.

Although this is a technically solvable problem, Seiberg said that nominating and confirming additional commissioners could take several months. This means the White House would need to initiate the relevant procedures within the next four to six weeks, otherwise the CFTC staffing issue would counteract the bill’s legislative timeline. It is also worth noting that when Selig appeared at a House Agriculture Committee hearing in April, he said that despite the staffing shortage, the CFTC still has an obligation to continue rulemaking work and will not stop due to vacancies.

Prediction market entanglement: a flashpoint of partisan differences

Seiberg specifically pointed out in the report that the likelihood of lawmakers trying to incorporate prediction market regulation into the CLARITY Act is increasing. This issue is far more than just whether sports betting or event-guessing is legal—it also involves insider trading risks and potential conflicts of interest related to the Trump family.

In fact, U.S. Congress and the CFTC’s attention to prediction markets has increased significantly in recent months. In February 2026, six senators jointly sent a letter to the CFTC demanding stronger regulation of prediction markets. In March, the CFTC issued a notice on pre-rulemaking for prediction market contracts and called on exchanges to communicate with regulators before launching markets that are susceptible to manipulation. At the same time, multiple bills have been introduced in Congress aiming to restrict or prohibit trading in certain types of prediction market contracts.

Seiberg made it explicit: “Just the act of proposing amendments to prediction markets alone is enough for Democrats to step away from the camp supporting the bill.” Because the CLARITY Act needs cross-party support of 60 votes in the Senate to pass, any amendment that could cause Democratic seats to be lost would pose a substantial threat.

Political association risk: the ongoing shadow of the presidential family project

The third key variable in the report is World Liberty Financial, the crypto project associated with the Trump family. The project has recently remained in the headlines due to multiple controversies—most centrally, the core issue is that the WLFI tokens of early investors are restricted from being sold until after the end of Trump’s current term, and then the project proposed to redesign the long-standing unlock schedule via governance votes, stretching the unlock timeline for years.

More seriously, crypto entrepreneur Justin Sun filed a lawsuit against World Liberty Financial in a California federal court on April 22, alleging that the project “fraudulently” froze tokens worth up to $1 billion and stripped him of his governance voting rights. World Liberty Financial CEO Zach Witkoff responded that the lawsuit is “baseless,” but the legal dispute itself has already become a political liability.

Seiberg’s judgment is very clear: continued attention to this project will make it harder for Democratic lawmakers to provide political backing for the crypto bill. In an environment where bipartisan cooperation is required to advance legislation, controversies involving the President’s family business interests are undoubtedly a heavy political burden.

Geopolitical variable: compliance scrutiny triggered by Iran’s crypto tolls

The fourth obstacle comes from the geopolitical arena. Since mid-March 2026, reports indicate that Iran’s Islamic Revolutionary Guard Corps has reportedly begun charging tolls on passing vessels through the Strait of Hormuz and is accepting payment in cryptocurrencies or RMB. Based on publicly available estimates, the toll for each supertanker could be as high as $2 million, and given the current volume of traffic, this fee system could generate up to $20 million in revenue per day, with estimated monthly revenue of $600 million to $800 million.

This development has brought unexpected political pressure to U.S. crypto legislation. Seiberg’s analysis holds that Iran’s use of cryptocurrencies for sovereign-level toll payments may prompt lawmakers to increase their scrutiny of the anti-money-laundering provisions in the CLARITY Act and related Bank Secrecy Act and BSA content. He wrote: “We may see Democrats propose an amendment in response, and even if, from the perspective of crypto platforms, this amendment is intended to be a ‘poison pill’ to kill the bill, it would still be difficult to block politically.”

The legislative bundling trap: the potential threat from the credit card bill

The fifth obstacle is not directly related to the content of the bill, but it is equally deadly. Senators Dick Durbin and Roger Marshall are expected to push for attaching the Credit Card Competition Act as an amendment to the CLARITY Act. The bill requires credit cards issued by banks with assets exceeding $100 billion to support at least two unrelated payment networks for processing, in order to reduce swipe fees.

This attempt is not the first. In January 2026, Senator Marshall previously tried to attach a similar amendment to the crypto market-structure bill under consideration by the Senate Agriculture Committee, but the amendment ultimately was not proposed due to strong opposition from industry organizations such as credit unions.

Seiberg is cautious about the likelihood of bundling succeeding, saying, “We don’t expect it to pass, but if our judgment is wrong, it could ruin the entire bill.” From a legislative-technical perspective, grafting a highly controversial credit card industry regulatory provision onto a crypto bill is essentially artificially creating cross-industry conflicts, greatly increasing the bill’s political transaction costs.

The core contest: stablecoin yield terms remain the biggest variable

Beyond the five obstacles, the issue of stablecoin yields remains the most critical sticking point for advancing the bill. As of April 22, the Senate Banking Committee has not set a specific voting date. According to Senator Tillis’s latest statement, the compromise text on stablecoin yield terms is likely to be officially released only on the eve of the vote, and the wording may still be adjusted based on feedback from the parties.

The compromise proposal currently emerging includes the following key elements: banning platforms from providing yield returns on stablecoin balances held on the platform; allowing active rewards when stablecoins are used for payment, transfers, and other scenarios. However, the banking industry’s resistance to this proposal remains firm, with the view that even active rewards could draw deposits away from the regulated banking system. Sources have accused banks of “not engaging in negotiations in good faith,” and hinted that banks may be deliberately delaying or even stifling the legislation.

TD Cowen believes that for the bill to truly be passed, it will likely require direct intervention by President Trump himself, along with a package of compromise measures that can win bipartisan support and satisfy the Senate’s 60-vote threshold. Seiberg wrote: “This is a challenge, but not an impossibility. That’s why there is still a possibility of legislative passage—although it’s not our base-case scenario.”

Conclusion

The legislative process for the CLARITY Act is entering a critical window. The five major obstacles revealed in TD Cowen’s latest research report reflect the multi-layered structural complexity that crypto legislation in the U.S. faces—it must not only resolve regulatory disagreements within the industry, but also deal with cross-cutting pressures across dimensions such as institutional capacity, market disputes, geopolitical events, and legislative bargaining.

For global cryptocurrency market participants, the fate of the CLARITY Act is not only about establishing the U.S. digital asset regulatory framework—it will also profoundly influence the direction of evolution for crypto compliance pathways worldwide. Whether or not the bill ultimately completes the legislative process within 2026, the structural debate around digital asset regulation has already entered an irreversible new phase.