Running out of time on Clarity: State of Crypto

April is almost over. May is the month to watch.

The crypto market structure bill has not made much public movement in a month. While making a prognosis on the bill is difficult, it's not hard to see that the clock for passage is running out.

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The narrative

We won't get the crypto market structure bill this month. That's not the end of the process, but we're approaching a timeline that'll surely increase the amount of gray in people's hair.

Why it matters

Much of what's happened around market structure issues — Securities and Exchange Commission staff statements, for example — are not permanent guidance. The SEC has time to come up with rules that go through a notice-and-comment period, but that'll take time. Market structure legislation was aimed at cementing crypto industry goals and regulations into law, making it that much more difficult for a future administration to undo those rules. In other words, without the Clarity Act, it's entirely possible that we'll have this same conversation in a few years. To be clear, this isn't advocating for this bill, much as I might wish to write about anything else. This is just stating a likely future scenario.

Breaking it down

Memorial Day — May 25, or just about a month from now — has been seen since at least last December as a "drop-dead" date for legislation to advance, if it is to have a chance at passage before the election. As we get into the summer, lawmakers are going to leave town to run their campaigns and won't have time to worry about a crypto bill (or much other legislation).

Before Congress leaves, it's going to take up a bill to fund the Department of Homeland Security (House) and figure out if Kevin Warsh will become the next Fed chair (Senate).

CoinDesk's Jesse Hamilton laid out the other steps necessary to get Clarity across the finish line — i.e. President Donald Trump's desk — last week.

The crypto industry desperately wants this bill; more than 100 signed an open letter last week urging a markup hearing in the Senate Banking Committee, which would be the first step toward overall passage.

Still, at this point it's unclear how close the committee is to moving forward. Stablecoin yield continues to dominate the conversation, but other outstanding issues have not been resolved either, at least publicly.

Even when these issues are resolved, the House will need to vote again on the bill.

Congressman French Hill, who chairs the House Financial Services Committee, told CoinDesk earlier this month that many of the outstanding issues around sales practices for stablecoins and decentralized finance had already been sorted out by the House in its version of the bill, meaning the Senate should be able to find common ground.

"I think the Senate's relayed quite a bit on the House work on both FIT21 [the Financial Innovation and Technology for the 21st Century Act] from the previous Congress and CLARITY in this Congress," he said. "I think you see that quite clearly in the Senate Agriculture markup, I think you see that in the basic draft of many of the components in the Senate bill."

And, well, not to plug Consensus Miami again, but we are going to be discussing this next month. It'll be a party, you should swing by.

This week

• There are no major hearings or policy events scheduled, though the Senate Banking Committee may notice a vote on Kevin Warsh's nomination for Fed Chair.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at nik@coindesk.com or find me on Bluesky @nikhileshde.bsky.social.

You can also join the group conversation on Telegram.

See ya’ll next week!

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