Inside Crypto's Senate Stumble As the CLARITY Act Gets Postponed

What was supposed to be a breakout week for crypto in Washington instead turned into a reminder of how fragile political momentum can be.

On Wednesday, Coinbase CEO Brian Armstrong pulled his company's blessing from the bill as concessions were made around the framework to regulate crypto. Later that same evening, the Senate Banking Committee officially announced the decision to postpone the markup of the CLARITY Act.

Crypto lawyer and Massachusetts Senate candidate John Deaton joined Coinage this week to discuss why the setback isn’t just procedural and why the clock is already ticking.

“I expect them to get back to the table,” Deaton said. “But the reality is, if this bill doesn’t get done by the end of this first quarter, the odds dramatically drop. And certainly by the second quarter, if it’s not done, then it’s not getting done.” Odds of the bill passing in 2026 dropped below 20% on Polymarket on Wednesday, but quickly rebounded as other crypto players echoed hopes more compromise could be found.

That hope came into sharper focus when Ripple CEO Brad Garlinghouse struck a more conciliatory tone, warning against letting perfect be the enemy of progress. “Clarity is always better than chaos,” Garlinghouse said Friday at a conference in Switzerland. “Is it perfect? No, certainly not. But is it better than nothing? Absolutely.”

One of the main issues at hand seems to be re-litigating what was already settled in the GENIUS Act from last summer when Congress codified rules around stablecoins. Lobbyists for big banks seem to have made inroads there, however, as part of the CLARITY Act now focuses in on blocking partners from potentially paying interest on stablecoins. As many in the crypto industry pointed out, that would help protect banks from competing products that could threaten their stranglehold on bank deposits.

Deaton framed the move by Coinbase to drop its support for the bill as is as less of a tantrum and more as leverage. “Whether you agree with it or not, [Armstrong] was simply using this as a negotiation,” he said. “He said he doesn’t want to walk away, but let them know that he will and he’ll pull support.”

That posture immediately highlighted a deeper reality: crypto is no longer a monolith in Washington. Public companies, private startups, venture firms, and token-driven networks all want regulatory clarity — but not always the same version of it. “Coinbase is a publicly traded company,” Deaton noted. “Brian Armstrong is representing his shareholders. That’s different than Ripple."

Still, however, as a pro-crypto politician who had debated Elizabeth Warren in the last election cycle, Deaton was blunt about what’s at stake.

“We are either going to move forward and make America the crypto capital of the world or we’re not,” he said. “And I don’t think this bill in its current form makes America the capital of the world as far as crypto.”

Coinage is a community-owned DAO letting our NFT holders become actual co-owners in one of the fastest-growing Web3 media outlets. Mint an NFT and become a member today to open a path to patronage dividends, or stake with us to support our project. Subscribe to our free Substack to catch all the important headlines from around the crypto world.