Galaxy Research Warns CLARITY Act Faces Major Hurdles Despite Tillis and Alsobrooks Stablecoin Deal

Momentum briefly returned to one of the most closely watched cryptocurrency bills in Washington this month, but behind the scenes, structural disagreements continue to threaten its survival. Despite a breakthrough agreement on stablecoin rewards, analysts warn that the broader legislative effort remains far from secure.

The proposed CLARITY Act, designed to establish a comprehensive regulatory framework for digital assets in the United States, has regained attention following a tentative deal between lawmakers and the White House. The agreement, led by Senators Thom Tillis and Angela Alsobrooks, attempts to address mounting concerns from traditional financial institutions over yield-bearing stablecoins. Critics have long argued that such incentives could accelerate a shift of deposits away from banks and into crypto platforms, raising systemic risks.

Officials described the compromise as a “major milestone,” signaling rare bipartisan alignment in an otherwise fragmented policy environment. Yet, while the deal removes one of the most visible roadblocks, it does little to resolve deeper tensions embedded within the legislation.

According to Galaxy Research, the bill still faces a series of unresolved challenges that could determine its fate. Alex Thorn, the firm’s head of research, has cautioned that focusing solely on stablecoins risks overlooking more complex and politically sensitive issues. Among them are the regulatory treatment of decentralized finance, legal protections for software developers, and the scope of authority granted to the Securities and Exchange Commission.

These questions strike at the core of how the crypto industry will be governed. Decisions around DeFi, in particular, carry significant implications, as policymakers grapple with how to regulate systems that operate without centralized intermediaries. Similarly, the extent of liability for developers remains a contentious issue, with industry advocates warning that overly restrictive rules could stifle innovation.

Timing is now emerging as a critical factor. Thorn has emphasized that the legislative window is rapidly narrowing, noting that failure to advance the bill through the Senate Banking Committee by the end of April would drastically reduce its chances of passage this year. With congressional schedules tightening and competing priorities mounting, delays could prove fatal to the effort.

The urgency reflects broader uncertainty within the digital asset sector, where regulatory clarity has long been seen as a prerequisite for sustained institutional adoption. Without a clear framework, companies and investors continue to navigate a fragmented landscape marked by overlapping jurisdictions and inconsistent enforcement.

While the recent agreement has injected a degree of optimism, it has also exposed the limits of incremental progress. The remaining debates are not merely technical but ideological, reflecting divergent views on risk, innovation, and the role of government oversight in emerging financial systems.

As lawmakers shift their focus to the unresolved components of the bill, the coming weeks are likely to determine whether the CLARITY Act can move beyond negotiation and into law. For now, the legislation stands at a crossroads, buoyed by partial consensus but weighed down by fundamental disagreements that remain unresolved.