According to the latest reports, Banks and crypto firms have agreed on a deal for the Bitcoin market structure bill, with an official announcement expected this week. The CLARITY Act had been stuck since January over whether crypto platforms could offer yield on stablecoins, but that issue now appears resolved.
However, John E. Deaton has warned that the CLARITY Act could collapse if not passed soon.
“It’s going to die… Innovation will die potentially here,” Deaton said in a recent interview, stressing that time is running out as political focus begins shifting toward the 2026 midterm elections.
Why the CLARITY Act Could Stall
According to Deaton, the biggest threat isn’t opposition, it’s timing. Once summer arrives, election campaigns are expected to dominate Washington, leaving little room for complex legislation like crypto regulation.
“If we get into the summer months, it’s just probably not going to happen,” he said, pointing out that lawmakers will be consumed by campaigning rather than policymaking.
This creates a narrow window over the next few weeks for progress before Congress slows down ahead of the August recess.
Midterms Could Change Everything
Deaton also warned that election outcomes could reshape the entire regulatory landscape. If Democrats gain control, Elizabeth Warren could lead the Senate Banking Committee.
He argues that under her leadership, the approach would lean toward stricter enforcement rather than innovation-friendly rules, making the CLARITY Act unlikely to pass.
With limited time and rising political pressure, the coming weeks may decide whether the U.S. gets clear crypto regulation or sees the effort fade entirely.
Meanwhile, chances of the CLARITY Act passing are slipping, with Polymarket now showing odds at 60% in April, down from 82% in February, showing that confidence around the bill is starting to cool.
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