Crypto Bill: Galaxy Research Warns of Remaining Regulatory Hurdles

A much-anticipated tentative agreement on stablecoin rewards has breathed new life into the stalled CLARITY Act.

However, industry experts are warning that the landmark cryptocurrency legislation still faces a ticking clock and a minefield of unresolved issues.

Last week, key lawmakers and the White House reached an "agreement in principle" to resolve the much-talked-about clash between traditional banks and the digital asset industry.

However, according to Alex Thorn, head of firmwide research at Galaxy Digital, the crypto industry should hold off on celebrating (at least for now).

Much-needed compromise

Since January, the CLARITY Act has been stalled in the Senate Banking Committee.

This was due to a standoff over stablecoin rewards offered by exchanges. Traditional Wall Street groups have lobbied heavily against them.

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Their key argument is that earning it would trigger widespread "deposit flight" from standard bank accounts.

On Friday, March 20, Senator Thom Tillis (R-N.C.) and Senator Angela Alsobrooks (D-Md.) announced a tentative deal with White House officials to resolve the issue.

Patrick Witt, a top White House crypto policy adviser, praised the bipartisan effort on X, calling it a "major milestone toward passing the CLARITY Act."

Hidden hurdles

The stablecoin agreement is a massive step forward, but Alex Thorn has warned that the stablecoin dispute may simply be the "current hill the bill is dying on," and other disagreements have to be taken into account as well.

If the stablecoin rewards issue is fully resolved, Thorn pointed out several other highly contentious topics, including DeFi regulation, developer protections, SEC powers and ethics rules.

Thorn emphasized that the window for passing comprehensive crypto legislation this year is rapidly closing. "If CLARITY doesn't pass committee by the end of April, odds of passage in 2026 become extremely low," Thorn warned. "This needs to hit the Senate floor by early May... floor time is running out and odds diminish every day that passes."