The May 2026 Senate Deadline for the CLARITY Act Risks a Four-Year Regulatory Void

U.S.-based crypto firms continue relocating to jurisdictions with defined rules, including Singapore and Abu Dhabi, to avoid years of regulatory ambiguity. The CLARITY Act aims to end this migration by assigning jurisdictional boundaries between the SEC and other agencies for digital assets. The bill passed the House in July 2025 but has since remained stalled in the Senate Banking Committee. The holdup centers on whether stablecoin issuers can offer yield to users. While crypto firms argue the feature is essential for competition, traditional banks contend it blurs the line between deposits and securities. The Senate Banking Committee has not yet scheduled a markup hearing. Senator Cynthia Lummis warned that if the bill does not advance by May 2026, the 2026 midterm election cycle will shift congressional focus from policy to campaigning. Legislative momentum for federal crypto regulation may not return until at least 2030.