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The 15-9 vote by the Senate Banking Committee marks a notable win for the crypto industry - but major obstacles still lie ahead.
Below is our PREVIEW of this event, as published on Wednesday, May 13th - on the eve of the Senate "markup".
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The Digital Asset Market Clarity Act of 2025 (H.R. 3633), (the CLARITY Act) marks the most comprehensive US crypto market-structure bill ever to clear a chamber of Congress.
It passed the House by 294 votes to 134 on July 17, 2025, and has spent the last four months under consideration by the Senate.
As of May 6, 2026, a bipartisan compromise on stablecoin yield (struck between Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD)) has cleared the last major hurdle and the Senate Banking Committee is set to hold a “markup”.
DECODE: A “markup” is a legislative process where the Senate committee members debate and vote on amendments to the bill to refine, edit, and ultimately decide whether a bill should advance to the full Senate for a vote.
This highly-anticipated Senate “markup” on the CLARITY Act is set for Thursday, May 14, 2026 at 10:30 am ET.
The CLARITY Act achieves two things:
First, it draws a clear line between the CFTC and SEC, the two main US financial regulators, to decide which is in charge of regulating each type of cryptoasset.
Second, it sets up a federal rulebook for the exchanges, brokers, and dealers that trade it:
SEC keeps authority over issuance, investment contracts, and fraud, but cannot label tokens securities based only on initial distribution.
The act creates a federal framework for digital-commodity exchanges and brokers and dealers, with CFTC-style custody, disclosure, and consumer protections.
The Senate Banking Committee is made up of 24 members in the current Congress, with 13 Republicans and 11 Democrats.
For the CLARITY Act to pass the markup and be reported out of committee, it would need a simple majority (13 votes, in the case that every member participates).
Since Republicans hold 13 seats on the committee, they could technically advance the bill without Democratic support; however, unanimous Republican support has not been formally confirmed.
The markup is led by Chairman Tim Scott (R-SC), who controls the committee agenda and manages the bill through the session, while Ranking Member Elizabeth Warren (D-MA) leads the Democratic side of the committee’s response.
There are four main potential sources of contention at this week’s markup, based on public criticism and commentary from senators on the CLARITY Act:
1) Stablecoin rewards / yield — Banks are likely to keep pushing back because the bill bans stablecoin “interest or yield” that is “economically or functionally equivalent” to bank-deposit interest, but still allows “rewards or incentives based on bona fide activities or bona fide transactions.”
2) DeFi AML / KYC — Senator Warren and aligned Democrats are likely to argue the bill needs stronger anti-money-laundering rules, because the bill only targets “non-decentralized finance trading protocols” where someone can “control or materially alter” the protocol or “restrict, censor, or prohibit” its use.
3) SEC vs CFTC jurisdiction — Democrats may object if they think the bill shifts too much oversight away from the SEC, while Republicans and crypto firms tend to argue the CFTC needs a clearer role over digital commodities.
4) The “Trump amendment” / ethics rules — Warren’s side is likely to push for language restricting officials and their families from profiting from crypto, while the White House is resisting politician-specific language.
The latest compromise on the CLARITY Act is defined in “SEC. 404. PROHIBITING INTEREST AND YIELD ON PAYMENT”, which:
Bans crypto firms from paying “any form of interest or yield” on stablecoin balances “equivalent to the payment of interest or yield on an interest-bearing bank deposit.”
Explicitly preserves “activity-based or transaction-based rewards and incentives” tied to crypto activity, including stablecoin activity, provided they are not equivalent to interest on a bank deposit, such as interest paid on passive stablecoin balances.
However, the bank lobby is still not satisfied.
Although President Trump signed the GENIUS Act in July 2025, which created a framework for payment stablecoins and barred issuers from paying interest on digital dollars, the American Bankers Association (ABA) argues that the CLARITY Act still leaves a major loophole.
Their concern is that even if stablecoin issuers cannot pay interest directly, other crypto companies, such as exchanges, could still offer interest-like rewards, potentially drawing deposits away from banks and increasing risks for consumers who may not understand that stablecoin wallets are not insured bank accounts.
“Urge your lawmakers to tighten restrictions on paying interest, yield or rewards that function like interest on payment stablecoins to cover all market participants” — American Bankers Association (ABA)
Lummis, Tillis and Alsobrooks have collectively described the stablecoin language as final.
Tillis has pushed back on the bank lobby’s objections, saying they “respectfully agree to disagree,” and signaling that the negotiation is closed.
The possible outcomes are that the committee:
approves the bill as drafted
approves it with amendments
does not advance it.
If the Senate rewrite is limited to amendments that have already been negotiated, it could be handled during the markup itself.
But if senators need to reopen major disputes, the committee could delay the vote and postpone the markup, needing to circulate revised text before moving ahead.
This has happened previously with the CLARITY Act when the Senate Banking Committee postponed a January markup after industry support weakened and disputes over stablecoin yield intensified.
If the bill is reported favorably by the committee, it advances for potential consideration by the full Senate.
The White House and several senators have floated July 4, 2026 as a target for signing the CLARITY Act into law, but that appears to be the most optimistic scenario.
"We're targeting July 4th. I think that would be a tremendous birthday present for America, celebrating our 250th." — Patrick Witt, Executive Director, President's Council of Advisors for Digital Assets, Consensus Miami
Based on the timelines for previous bills becoming law, an August–September target appears more realistic, assuming the bill moves through each stage without major objections or procedural delays:
May 14, 2026 — Senate Banking reports the bill out of committee with no or minor amendments.
Late May to mid-June — The Senate Banking Committee’s CLARITY Act draft must then be merged with the Senate Agriculture Committee’s Digital Commodity Intermediaries Act, which advanced on January 29, 2026, because the two committees split oversight of the same market-structure package: the Senate Banking Committee covers the SEC-facing provisions, while the Senate Agriculture Committee controls the CFTC framework. The drafts are broadly aligned, but differences over issues such as crypto firm registration timelines must be reconciled into a single legislative text, ready to move to the Senate floor.
Late June to mid-July — The bill moves to a floor vote in the Senate. To reach a final passage vote, the CLARITY Act must first secure 60 votes to invoke cloture, which is the procedure by which the U.S. Senate can vote to limit debate on a bill and move it toward a final vote. With Republicans holding 53 of the Senate’s 100 seats, the bill would need at least 7 votes from the Democratic caucus, assuming every Republican votes yes.
Mid-July to August — Reconciliation with the House version. The Senate version will differ from the bill the House passed in July 2025, so the two chambers either go to a formal conference committee or send the bill back and forth between them, known as ping-pong. For the GENIUS Act, the Senate-to-House step took 30 days, with the Senate passing the bill on 17 June 2025 and the House passing it on July 17, 2025.
August or September 2026 — Final passage in both chambers, followed by the presidential signature. The White House has publicly committed to signing immediately on receipt.
The biggest risk in the realistic schedule is the August recess.
If the bill is not on the President's desk by mid-September, midterm campaigning may take precedence and make a politically charged crypto vote harder to secure the necessary support.
Polymarket bets are pricing in the likelihood of "CLARITY Act signed into law in 2026?" as more likely than not, after the odds repriced from roughly 46% to 64% in the 24 hours after the stablecoin yield compromise release on May 1, 2026. It has since fluctuated between highs of 80% and lows of 60% in anticipation of the markup.
Bloomberg Intelligence also sees a greater-than-even (60%) chance that the CLARITY Act is passed within 2026.
DISCLAIMER:This article is provided for general information and reflects the author’s views only. It does not constitute investment advice, nor an offer or solicitation to buy or sell any financial instruments or digital assets. Your ability to access or use any products or services mentioned may be subject to the laws and regulatory requirements of your jurisdiction.