Coinbase Warned the CLARITY Act May Not Pass This Year

Patrick Witt says the CLARITY Act window is closing

Yahoo Finance reported this week that Witt told investors there was no time to wait. That lines up with Crypto In America’s February 23 report that he had already overseen three closed-door meetings between crypto firms and banking groups and that the third session went line by line through draft language.

Witt sounded more upbeat a month ago. Crypto In America reported that he said the field of disagreement had narrowed and that he hoped the rewards issue could be settled by March 1, 2026. That deadline passed without public text, just as we noted in our March 1 pressure window coverage.

The White House can broker language, but Sen. Tim Scott still controls whether a markup gets posted, and the committee page still shows only the postponed January session. Until that changes, every optimistic headline is still running ahead of procedure.

Stablecoin rewards keep Coinbase and banks at war

The core fight is still stablecoin rewards. Banks want a clean ban. Crypto firms want room for activity-based incentives that do not read like bank interest.

That clash already blew up once. In January, Brian Armstrong signaled Coinbase would rather block the bill than accept a draft that crippled rewards, a standoff we covered in our Coinbase fight story and later in the White House impasse report.

That message is now getting sharper in public. A Fox News clip recirculated this week in an X post from Vivek4real framed Armstrong’s argument as a direct attack on big-bank lobbying against President Donald Trump’s pro-crypto agenda. The clip did not reveal new bill text, but it showed how the fight is now being sold to retail audiences: not as a dry drafting dispute, but as a battle over who controls the rails.

Fresh chatter made the problem worse this week. Cinco Dias, citing Bloomberg and other reporting, said the current draft could bar platforms from offering rewards directly or indirectly just for holding stablecoins while still leaving room for loyalty, subscription, or payment-linked perks. The draft was not public, so the exact language was not immediately clear.

Even so, the direction was clear. If passive USDC rewards are choked off, Coinbase loses a consumer hook and banks protect deposits. If the final text leaves a carve-out, banks lose the clean prohibition they have been lobbying for, which is why our earlier look at the banking campaign still sits at the center of the story.

The bill is also carrying more political baggage than it did two months ago. As Decrypt reported on March 18, DeFi carve-outs and Trump family crypto ties are still active points of friction, not side debates that can be cleaned up later.

April and May look like the last real CLARITY Act window

Decrypt reported that Sen. Cynthia Lummis said Senate Banking would try to mark up the bill in the second half of April. In the same piece, Sen. Bernie Moreno warned that if it is not passed by May, digital asset legislation may not pass for the foreseeable future.

That is the timeline traders are now pricing. It is no longer just about whether the bill has support. It is about whether the Senate can settle rewards, keep enough DeFi protections for industry backers, and answer ethics demands from Democrats before the calendar hardens.

Decrypt also reported that Sen. Thom Tillis and Sen. Angela Alsobrooks were negotiating directly with the White House on yield language. Sen. Kirsten Gillibrand said senior officials should not be crypto issuers or promoters. Any one of those fights can slow floor math even if a banking compromise appears.

The bill is not dead. But it is now running on unpublished text, a committee schedule that has not moved since January 15, and a compromise Coinbase may still reject. Watch for a new markup date, public language on what counts as an allowed reward, and signs the final package can survive DeFi and ethics objections. Until then, the drop from 82% on February 20 to 52% on March 28 looks less like noise and more like a warning.