April 22, 2026—The Washington research team of investment bank TD Cowen released an analytical report on the outlook for US crypto market structure legislation. In the report, Managing Director Jaret Seiberg emphasized that disputes over stablecoin yield provisions are not the only challenge facing current legislation. For the Digital Asset Market Clarity Act (also known as the CLARITY Act) to pass through Congress, it must overcome five additional structural obstacles.
These five major hurdles are: severe understaffing at the US Commodity Futures Trading Commission (CFTC); the risk that prediction market regulation issues may be forcibly included in the bill; ongoing political controversy surrounding the Trump family’s crypto project, World Liberty Financial; anti-money laundering pressure stemming from Iran’s imposition of crypto transit fees in the Strait of Hormuz; and the risk of the Credit Card Competition Act being bundled with the legislation.
Seiberg reiterated his previous assessment in the report, estimating the bill has about a one-in-three chance of passing in 2026. Meanwhile, Galaxy Digital offered a more optimistic outlook, suggesting a 50% probability, but acknowledged the bill faces "a large number of unresolved issues that must be addressed under extreme time pressure."
From House Approval to Senate Stalemate
The CLARITY Act aims to establish a unified federal regulatory framework for digital assets in the US. In July 2025, the bill passed the House of Representatives with 294 votes in favor and 134 against. All 216 Republican members who voted supported the bill, along with 78 Democrats who crossed party lines, marking a rare bipartisan consensus. The bill then moved to the Senate, entering intensive review and negotiation within the Senate Banking Committee starting January 2026.
However, the legislative process has been far from smooth. In January 2026, the Senate Banking Committee announced a postponement of the bill’s review due to disputes over stablecoin yield provisions. Subsequent negotiations between the banking sector and the crypto industry repeatedly stalled over whether stablecoin platforms could offer yield to users. At the end of March, Senators Thom Tillis and Angela Alsobrooks brokered a compromise: platforms would be prohibited from offering passive yield on stablecoin balances, but could provide activity-based rewards when stablecoins are used for payments or transfers. While the crypto industry generally accepted this compromise, the banking sector continued to push back.
As of April 22, Senator Tillis told Politico that the Senate Banking Committee would not vote on the bill until at least May, and that the final text of the stablecoin yield provision would likely be released only on the eve of the vote. TD Cowen’s analysis suggests the bill must achieve key milestones by the end of July to make meaningful progress before the August congressional recess, or else the legislative window will narrow sharply.
In-Depth Analysis: Five Structural Challenges Examined
Regulatory Agency Shortfall: CFTC Reduced to One Commissioner
The US Commodity Futures Trading Commission is currently operating in a highly abnormal state. The agency is statutorily structured as a five-member commission, typically with bipartisan representation. Since Michael Selig became chair in December 2025, all four other commissioner seats have remained vacant, leaving Selig as the sole commissioner responsible for all decision-making.
This situation directly impacts the bill’s viability. If passed, the CLARITY Act would grant the CFTC significant new responsibilities for regulating digital asset markets, including oversight of digital commodity brokers, exchanges, and custodians. Entrusting such a major expansion of authority to a single commissioner poses substantial political challenges.
While technically solvable, Seiberg notes that nominating and confirming additional commissioners could take months. The White House must initiate the process within the next four to six weeks, or else CFTC staffing will conflict with the bill’s legislative timeline. Notably, Selig stated at an April House Agriculture Committee hearing that despite staffing shortages, the CFTC remains obligated to advance rulemaking and will not halt progress due to vacancies.
Prediction Market Entanglement: A Flashpoint for Partisan Divide
Seiberg highlighted in the report that lawmakers are increasingly likely to include prediction market regulation in the CLARITY Act. This issue goes beyond the legality of sports betting, touching on insider trading risks and potential conflicts of interest linked to the Trump family.
In recent months, congressional and CFTC scrutiny of prediction markets has intensified. In February 2026, six senators jointly urged the CFTC to strengthen oversight of prediction markets. In March, the CFTC issued a pre-rulemaking notice on prediction market contracts, urging exchanges to consult regulators before launching potentially manipulable markets. Multiple bills have also been introduced in Congress to restrict or ban certain types of prediction market contracts.
Seiberg makes it clear: "Simply proposing a prediction market amendment is enough to drive Democrats away from supporting the bill." Since the CLARITY Act requires 60 bipartisan Senate votes to pass, any amendment that risks losing Democratic support poses a significant threat.
Political Risk: The Ongoing Shadow of the President’s Family Project
The Trump family’s crypto project, World Liberty Financial, is the third key variable in the report. The project has recently dominated headlines due to several controversies—most notably, early investors’ WLFI tokens are locked until the end of Trump’s current term, and the project has proposed a governance vote to redesign the multi-year unlock schedule.
More seriously, crypto entrepreneur Justin Sun formally sued World Liberty Financial in California federal court on April 22, alleging the project "fraudulently" froze $1 billion worth of his tokens and deprived him of governance voting rights. CEO Zach Witkoff responded that the lawsuit is "baseless," but the legal dispute itself is a political liability.
Seiberg’s assessment is unequivocal: continued attention on this project makes it harder for Democratic senators to provide political backing for crypto legislation. In an environment where bipartisan cooperation is essential for passing laws, controversy over the president’s family business interests is a heavy political burden.
Geopolitical Variable: Compliance Scrutiny Triggered by Iran’s Crypto Fees
The fourth obstacle stems from geopolitics. Since mid-March 2026, Iran’s Islamic Revolutionary Guard Corps reportedly began charging transit fees for ships passing through the Strait of Hormuz, accepting payments in crypto or renminbi. Public estimates suggest each supertanker may pay up to $2 million; based on current traffic, this system could generate $20 million in daily revenue and $600–800 million monthly.
This development has brought unexpected political pressure to US crypto legislation. Seiberg’s analysis suggests Iran’s use of crypto for sovereign-level fees may prompt lawmakers to strengthen anti-money laundering provisions and Bank Secrecy Act requirements in the CLARITY Act. He writes: "We may see Democrats propose an amendment in response, and even if crypto platforms view it as a ‘poison pill’ designed to kill the bill, it may be politically unstoppable."
Legislative Bundling Trap: The Threat of the Credit Card Competition Act
The fifth obstacle is not directly related to the bill’s content but is equally critical. Senators Dick Durbin and Roger Marshall are expected to push for the Credit Card Competition Act to be attached as an amendment to the CLARITY Act. This bill requires banks with assets over $100 billion to issue credit cards that support at least two unrelated payment networks to reduce swipe fees.
This is not the first attempt. In January 2026, Senator Marshall tried to add a similar amendment to a crypto market structure bill reviewed by the Senate Agriculture Committee, but strong opposition from industry groups like credit unions prevented its introduction.
Seiberg is cautious about the likelihood of successful bundling, stating, "We don’t expect it to pass, but if we’re wrong, it could sink the entire bill." From a legislative perspective, grafting a highly controversial credit card regulation onto a crypto bill creates cross-industry conflict and dramatically increases the political transaction costs.
Core Standoff: Stablecoin Yield Provisions Remain the Biggest Variable
Beyond the five major obstacles, stablecoin yield remains the central sticking point. As of April 22, the Senate Banking Committee has not set a specific vote date. According to Senator Tillis’s latest comments, the compromise text for stablecoin yield is likely to be released only right before the vote, and its wording may still be adjusted based on stakeholder feedback.
The current compromise includes several key elements: platforms are prohibited from offering yield on stablecoin balances held in custody; activity-based rewards are permitted when stablecoins are used for payments or transfers. However, the banking sector remains strongly opposed, arguing that even activity-based rewards could draw deposits away from the regulated banking system. Sources accuse banks of "not negotiating in good faith," suggesting they may be deliberately delaying or even seeking to kill the legislation.
TD Cowen believes the bill’s passage will likely require direct intervention from President Trump and a compromise that can win bipartisan support and meet the Senate’s 60-vote threshold. Seiberg writes: "It’s a challenge, but not impossible. That’s why passage remains possible—even though it’s not our base case."
Conclusion
The CLARITY Act’s legislative process is entering a critical window. TD Cowen’s latest report highlights five major obstacles, revealing the multi-layered structural complexity of crypto legislation within the US political system. The bill must resolve internal regulatory disagreements and contend with cross-cutting pressures from institutional capacity, market controversies, geopolitical events, and legislative maneuvering.
For global crypto market participants, the fate of the CLARITY Act will shape not only the establishment of the US digital asset regulatory framework but also the evolution of crypto compliance pathways worldwide. Regardless of whether the bill is enacted in 2026, structural debate over digital asset regulation has entered an irreversible new stage.
