Brad Garlinghouse believes the long-stalled Digital Asset Market Clarity Act is closer to becoming law than many expect. In a recent interview, the Ripple chief executive said there is an “80% chance” the bill will pass by the end of April, pointing to intensified negotiations between crypto firms, banks, and U.S. lawmakers.
His comments come after months of gridlock in the Senate Banking Committee, where disagreements over stablecoin provisions derailed what had appeared to be near-final approval earlier this year.
Key Takeaways
- Brad Garlinghouse estimates an 80% probability that the Clarity Act will pass by the end of April amid renewed negotiations.
- The bill remains stalled in the Senate Banking Committee over disagreements on whether crypto platforms should be allowed to offer rewards on U.S. dollar-pegged stablecoins.
- Coinbase withdrew support for the Senate draft, with CEO Brian Armstrong warning, “We’d rather have no bill than a bad bill.”
- Intensified White House involvement and industry compromise efforts could determine whether the legislation clears the Senate before the spring recess.
Why the Bill Is Stuck
The Clarity Act is designed to draw a firm line between digital assets regulated by the Securities and Exchange Commission (SEC) and those overseen by the Commodity Futures Trading Commission (CFTC). The House passed the legislation last July, but the Senate has yet to follow suit.
The sticking point is a clause addressing stablecoin rewards. A draft version of the bill would bar crypto platforms from offering yield or rewards on U.S. dollar-pegged stablecoins. Lawmakers backing the restriction argue that such incentives resemble interest-bearing bank deposits without the same regulatory safeguards.
Stablecoins like Tether’s USDT and Circle’s USDC are pegged 1:1 to the U.S. dollar and widely used across crypto trading and payments. Ripple recently entered the segment with RLUSD, adding further industry interest in how the final rules take shape.
Traditional banks are concerned that if exchanges continue to offer higher returns on stablecoins, depositors could shift funds away from the banking system.
Standard Chartered’s global head of digital assets research, Geoff Kendrick, has warned that if the stablecoin market expands to $2 trillion, banks in developed economies could see as much as $500 billion in deposits migrate by 2028.
Crypto executives counter that banning rewards would unfairly tilt the playing field. Last month, Brian Armstrong announced that Coinbase had withdrawn support for the Senate draft, stating:
Ripple’s Push Amid Its SEC Fight
Garlinghouse has been a vocal advocate for regulatory clarity, particularly as Ripple continues its high-profile legal battle with the SEC over XRP. A prior federal court ruling determined that XRP itself is not a security in certain secondary-market transactions, a decision widely viewed as a partial victory for Ripple.
For Ripple, passage of the Clarity Act would cement clearer jurisdictional boundaries and reduce the risk of future enforcement actions based on regulatory ambiguity.
Garlinghouse acknowledged that compromise will be necessary, urging both industries to accept a workable solution rather than hold out for ideal terms. He said the legislation was “very close” to approval before talks broke down earlier this year.
White House Pressure and April Timeline
Negotiations have reportedly intensified in recent weeks. According to industry participants, the White House has pushed stakeholders to resolve differences before the spring recess. U.S.
Treasury Secretary Scott Bessent recently criticized what he described as “recalcitrant actors” resisting compromise, warning that a significant drain of bank deposits could impair lending to small businesses, agriculture, and real estate.
Another high-level meeting is expected this week to revisit the stablecoin yield provision. Prediction market Polymarket currently places the odds of passage at around 60%, suggesting cautious optimism among traders.
Garlinghouse’s 80% estimate is more bullish than market pricing, but it reflects growing momentum behind a deal. If lawmakers can bridge the final gap over stablecoin rewards, the Clarity Act could mark the most comprehensive U.S. crypto framework to date.
For a market weighed down by prolonged regulatory uncertainty, April may prove decisive.
