Crypto’s Fate Hangs in Balance as Republican Gridlock Threatens CLARITY Act

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CLARITY Act Gridlock Grows as Republicans Fight Over FISA and Budget

Progress on the CLARITY Act is stalled in Congress. House Republicans disagree on renewing the government’s surveillance powers and passing a budget, leaving little time to consider a crucial new bill for the cryptocurrency industry before the focus shifts to the upcoming midterm elections. This delay threatens the bill’s chances of becoming law.

Summary

  • House Republicans are divided over FISA Section 702 reauthorization, which expires April 19, with some members demanding the SAVE America Act be attached as a condition of their vote.
  • Senate Republicans are deadlocked on budget reconciliation for ICE and CBP funding, adding legislative pressure at the exact moment the CLARITY Act needs Senate Banking Committee attention.
  • The CLARITY Act must clear the Senate Banking Committee by late April to avoid being buried by the midterm calendar, with Senator Lummis warning this is “our last chance” until at least 2030.

The stalled CLARITY Act isn’t just a crypto issue; it’s caught in a broader political struggle. Republican disagreements on issues like surveillance laws, the budget, and foreign policy are taking up all the attention in Congress that this important crypto bill needs to pass in the next few weeks. While these other debates aren’t directly about cryptocurrency, they will ultimately decide whether or not the crypto legislation moves forward.

The Senate resumed work this week after its Easter break, with only about two weeks left before the focus shifts to midterm elections. As of April 15th, Senator Tim Scott, who leads the Senate Banking Committee, hasn’t scheduled a date to debate the CLARITY Act.

How FISA and Reconciliation Are Consuming the Window

A key part of the government’s foreign surveillance program, Section 702 of the FISA law, is set to expire on April 19th. House Speaker Mike Johnson wants to simply renew it, but some Republican lawmakers are refusing to vote for it unless changes to voting laws – specifically the SAVE America Act – are included. This disagreement could force leaders to seek votes from Democrats, which would take up valuable time and resources that the Senate doesn’t have available.

The situation with the federal budget is complicated. After Democrats in the Senate rejected typical funding measures, the Senate Budget Committee is now working on a second budget bill specifically to fund Immigration and Customs Enforcement (ICE) and Border Patrol. Some Republicans in the House say they won’t vote on the Senate’s partial funding plan for the Department of Homeland Security until this second bill is finished, causing significant delays that have already lasted for weeks.

The CLARITY Act Math and Why It Matters Now

Even if Tim Scott moves the bill forward in the Banking Committee this week, it still has a long path ahead. It needs to pass a committee vote, then a full Senate vote (which requires 60 votes). After that, the Senate and House versions of the bill need to be combined, as do the Banking and Agriculture Committee versions. Finally, the President would need to sign it into law. According to Justin Slaughter at Paradigm, just navigating the Senate floor procedures could take two to three weeks.

If the bill passes the Banking Committee by the end of April, it will be difficult to move forward. If it doesn’t, the Senate won’t have time to consider it until after the November elections, with breaks scheduled from August 10th and October 5th through the election. Experts at TD Cowen and Senator Lummis both believe a change in House control in November could effectively end the CLARITY Act’s chances for years.

What Is at Stake for Digital Assets

The CLARITY Act aims to clear up confusion about which financial regulator, the SEC or CFTC, oversees crypto infrastructure, which has currently stalled its development. Analysts at JPMorgan believe the bill passing around mid-year would be good news for the crypto market. Currently, Polymarket estimates there’s a 55% chance of it passing. However, the odds decrease as Congress focuses on other issues like FISA and the budget, and as Senator Tim Scott delays setting a date for consideration.

Senator Cynthia Lummis recently posted on X (formerly Twitter) that this is the final opportunity to pass the Clarity Act for several years, likely until 2030. It appears disagreements within the Republican party might actually prevent the bill from moving forward, confirming her concerns.

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2026-04-15 23:21