CLARITY Act heads to Senate Banking Committee markup

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CLARITY Act heads to Senate

Highlights

The Senate Banking Committee released a draft of the CLARITY Act.
Committee markup is expected on May 14.
Key disputes remain over stablecoin yield, DeFi oversight, and ethics provisions.
Committee approval would be a major step, but not a guarantee the bill becomes law.

Bill moves to Committee stage

Senate Banking Committee Chairman Tim Scott, digital assets subcommittee chair Cynthia Lummis, and Sen. Thom Tillis released the draft text of the digital asset market structure bill. The committee described the proposal as the result of months of negotiations with Democrats, regulators, law enforcement agencies, financial institutions, crypto companies, and consumer advocates.

The CLARITY Act is designed to create clearer rules for the U.S. crypto market. Its goals include defining the roles of federal regulators, strengthening investor protection, addressing illicit finance risks, and giving digital asset companies a clearer framework for operating in the United States.

The committee review, known as a markup, is expected to take place on May 14. During that process, senators will debate amendments and decide whether the bill should advance toward a full Senate vote. While committee approval would be a significant step, the path to President Donald Trump’s desk is not yet guaranteed.

Stablecoins, DeFi and ethics remain flashpoints

Several major issues remain unresolved. One of the most sensitive is whether stablecoin-related products should be allowed to offer yield or rewards. Banks have opposed such models, warning that they could draw deposits away from traditional financial institutions. Crypto companies argue that overly strict rules could limit innovation and weaken U.S. competitiveness.

The bill also faces questions over decentralized finance. Lawmakers are still weighing how much responsibility should fall on developers, front-end operators and other participants in DeFi systems.

Another potential obstacle is ethical language. Democrats have pushed for stronger restrictions that could apply to public officials and crypto assets connected to them. The current draft does not include the ethics provision some lawmakers have sought, and any effort to add one could slow the bill’s progress.

Still, the publication of the draft was seen by the crypto industry as a meaningful step forward. Companies have spent years calling for legislation that would clarify the roles of the SEC and CFTC and reduce uncertainty around tokens, exchanges, and DeFi platforms.

Regulatory push enters a critical phase

Even if the Banking Committee approves the draft, the bill still has several hurdles ahead. Portions of the broader crypto market structure package may also need to be aligned with work from the Senate Agriculture Committee, which has jurisdiction over commodities and derivatives markets.

For the crypto industry, the CLARITY Act could become the foundation for federal digital asset regulation in the United States. But the details will matter more than the headline. Rules on stablecoins, DeFi, token classification, and developer protections will determine whether the bill is seen as long-awaited clarity or another restrictive framework.

A successful committee vote this week would keep the bill alive and mark one of the most important steps in U.S. crypto legislation this year. Failure to resolve the remaining disputes could push the debate back into the same legislative gridlock that has delayed the bill for months.

We also reported the White House targets Clarity Act passage by July 4.

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