Bernstein: This is a critical window for the passage of the Clarity Act; failure to reach a compromise soon will increase the risk of delay or failure of the bill.

BlockBeats News, January 12, Wall Street institution Bernstein pointed out in its latest analysis report that as lawmakers face deepening divisions between the banking and crypto industries over stablecoin yield issues, the window for passing the U.S. crypto market structure bill is rapidly narrowing.

Analyst Gautam Chhugani noted in a report to clients on Monday that although the core content of the "Clarity Act" (including the distinction between digital commodities and securities and the regulatory approach to decentralized finance) is controversial, these topics are unlikely to hinder its progress. The analyst believes that the main obstacle lies in banking representatives attempting to restrict crypto platforms from offering stablecoin balance yields. Although the "GENIUS Act" signed into law by President Trump last year (mainly targeting stablecoins) prohibits stablecoin issuers from directly paying yields, it still allows crypto platforms and their affiliates to distribute yields to users (typically with an annualized rate of 2% to 4%).

The analyst stated that the banking industry views these incentives as a threat to traditional deposits, as the stablecoin market could grow from its current size of over $275 billions to several trillions of dollars and become a "systemically important" sector. The crypto industry, on the other hand, argues that reopening this discussion would undermine the hard-won legislative compromise of the "GENIUS Act" and is anti-competitive and anti-free market in nature.

The analyst said both sides see this issue as an insurmountable red line, and if a compromise cannot be reached soon, it will increase the risk of the bill being delayed or failing. Bernstein added that political timing is crucial, and the bill must make progress by the second quarter of 2026 at the latest to avoid being disrupted by midterm election dynamics. The company stated that the pro-crypto stance of the Trump administration brings advantages to the industry, but warned that if the yield dispute continues, the momentum for advancement may still stall. Chhugani emphasized that this is currently a "critical window period."