Bitcoin steadies as CLARITY Act seen unlikely before April

Key Points:

• Senate leaders project delay until April due to unresolved crypto policy disputes.
• Stalled Banking Committee markup highlights industry pushback and intra-party disagreements.
• Jurisdiction confusion and imprecise definitions complicate SEC-CFTC oversight and token classification.

According to Senate leadership, the clarity act is unlikely to advance before April. The timeline reflects unresolved debates over stablecoin yield, decentralized finance (DeFi), tokenized equities, and how oversight is split between the U.S. Securities and Exchange Commission (SEC) and the U.S. Commodity Futures Trading Commission (CFTC).

A postponed Senate Banking Committee markup underscored the stall, amid industry pushback and intra-party disagreements, as reported by Fox Business. The committee is still working through text changes that could reconcile competing priorities without creating new compliance gaps.

According to Baker McKenzie, the delay reveals how hard bipartisan crypto legislation remains even amid demand for clearer rules. The firm highlights persistent SEC vs CFTC jurisdictional confusion, token-classification challenges, and risks of overreach if definitions lack technical precision.

What the draft touches: yield, DeFi, tokenization, oversight

Stablecoin yield, rewards or interest-like distributions paid on fiat-pegged tokens, sits at the center of negotiations. A March 1 compromise target set by the White House has been framed as critical for maintaining momentum, according to Spendnode. Missing that window could sap enthusiasm heading into a tighter political season.

As reported by CCN, critics of the current draft argue it would eliminate stablecoin rewards, restrict DeFi in ways that could expand government access to user financial data, weaken the CFTC’s role relative to the SEC, and even ban tokenized equities. Those flashpoints map directly to the revenue models of exchanges and the design choices of open protocols.

Criticism around tokenized equities reflects concern that the bill could fence off on-chain representations of traditional stocks and cap innovation in secondary trading. “I’d rather have no bill than a bad bill,” said Brian Armstrong, CEO of Coinbase. His stance illustrates how a single clause can flip major industry stakeholders from support to opposition.

Former CFTC Chair Chris Giancarlo has warned that banks are most exposed without legal clarity, because long-horizon investment programs cannot proceed under uncertainty, as summarized by CoinCentral. If definitions and oversight lines remain unsettled, traditional institutions may continue to delay broader digital-asset initiatives.

What to watch next: milestones and scenarios

Near-term milestones include whether negotiators can finalize stablecoin-yield language in early March and narrow privacy concerns tied to DeFi monitoring. Industry groups have also sought revisions they say would prevent favoritism toward legacy financial firms, according to DLNews.

Scenario one is a revised passage later in the spring if yield, DeFi, and tokenization sections are tightened and jurisdiction is clarified. Scenario two is a piecemeal approach that advances discrete items while broader market-structure issues slip.

Scenario three is an extended delay, which some observers warn could leave the U.S. trailing jurisdictions such as the EU’s MiCA framework, as reported by Crypto Valley Journal. In each case, banks, exchanges, and protocols will likely plan for compliance under evolving SEC vs CFTC boundaries while hedging for further changes.