Coin Center Warns Future US Governments Could Intensify Crypto Crackdown Without Clear CLARITY Act Rules

As the United States advances the Digital Asset Market Clarity Act, or CLARITY Act, to regulate stablecoins, the boundary between traditional finance and cryptocurrency is being redrawn. Banks fear that if the bill allows issuers to offer interest or yield indirectly, payment stablecoins would effectively become substitutes for deposits. That would threaten traditional banks' funding sources and could weaken the banking system's lending capacity, prompting strong resistance and calls for amendments from the traditional financial sector.

On July 13, 2026, the American Bankers Association, the Independent Community Bankers of America and other groups sent a joint letter to Senate leaders seeking revisions to ambiguous stablecoin yield language in Section 404 of the bill. The ICBA warned that failure to close the loophole could drain as much as $1.3 trillion in bank deposits and reduce lending capacity by $850 billion. The bill passed a Senate committee in May, with a hearing scheduled for July 17.

The Clarity Act under consideration in the U.S. Congress aims to divide regulatory responsibilities for digital assets and establish clear rules for trading platforms, token issuers and institutional investors. Jefferies says enactment could accelerate institutional adoption of cryptocurrencies, while delays would allow regulatory uncertainty to continue driving cryptocurrency prices and blockchain-related stocks.

As of July 20, 2026, the Clarity Act had passed review by the U.S. Senate Banking Committee but still faced a compressed Senate calendar and political concerns. Jefferies warned that the outcome of the legislative process could amplify market volatility. The related reports disclosed no specific investment or transaction amounts and provided no date for a Senate vote.

The CLARITY Act aims to create the first federal market regulatory framework for U.S. digital assets, chiefly by defining the respective jurisdictions of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). If enacted, the bill would affect token classification, trading-platform compliance and investor protection. It is also a key part of the Trump administration’s effort to institutionalize cryptocurrency policy.

White House crypto adviser Patrick Witt said officials were pushing to complete the legislation by July 4, 2026. The Senate Banking Committee is expected to hold a markup in May before sending the bill to the Senate floor in June. However, four disputed issues — including stablecoin yield mechanisms and ethics provisions for public officials — still require a bipartisan compromise. The estimated chance of passage has fallen below 50%, while one reporter said the legislative process could make meeting the deadline difficult.

The US Congress is considering the CLARITY Act, which seeks to clarify regulatory responsibilities for digital assets and trading platforms and reduce legal uncertainty for crypto companies. Senator Cynthia Lummis says clear rules are critical to bringing businesses back to the United States and preserving the country’s leadership in financial technology.

Lummis warned that this week could be the United States’ last critical opportunity to advance the CLARITY Act before 2030. She said China could otherwise write the rules for a new financial era. Negotiations have continued since the Senate returned, but Democrats and Republicans remain divided over provisions covering lawmakers’ ethics and safeguards against bad actors. A vote on crypto market structure could take place as early as August.

The U.S. Congress is considering the Clarity Act, which would expand the Commodity Futures Trading Commission’s authority over digital asset markets. Brookings Institution fellow Aaron Klein said shifting responsibilities without a corresponding increase in enforcement resources would undermine investor protection and market order.

Klein warned that regulation could become little more than a formality if Congress grants the CFTC new powers without providing adequate funding and staff with digital asset expertise. Reports did not specify the additional budget, staffing levels or a firm timetable for deliberations, making the bill’s eventual resource allocation critical to its effectiveness.

The Clarity Act is a key U.S. congressional effort to provide greater regulatory certainty for crypto assets. It aims to establish a federal regulatory framework for payment stablecoins and clarify rules governing issuance, reserve assets and regulatory jurisdiction. Because stablecoins are widely used in trading and payments, the bill’s trajectory will affect compliance costs and market strategies across the industry.

The U.S. House of Representatives recently held a markup session on the Clarity Act, reviewing and debating the bill provision by provision. Despite disputes among lawmakers over some clauses, the measure advanced to the next stages of the legislative process. Existing reports did not disclose the exact date of the meeting, the vote tally or any amounts involved. The timing of a full House vote and Senate consideration remains to be seen.

The U.S. Digital Asset Market Clarity Act, or CLARITY Act, aims to delineate the regulatory authority of the SEC and CFTC and establish rules for blockchain networks, tokens and trading platforms. The House passed the bill by a vote of 294–134 in July 2025, seeking to reduce regulatory uncertainty and the risk of the industry moving offshore.

The Senate Banking Committee advanced a related bipartisan version on May 14, 2026. It must next be reconciled with the Agriculture Committee’s version before going to the full Senate for a vote. Andreessen Horowitz’s a16z crypto subsequently said clear rules could foster domestic innovation and preserve the dollar’s position. At the time, the U.S. Dollar Index stood at 99.27, up 1.28% over the previous 30 days.

The CLARITY Act seeks to establish a US crypto-asset market structure framework and clarify the division of regulatory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission. If the bill reaches the full Senate, it would typically need at least 60 votes to advance, making bipartisan cooperation critical to its prospects of becoming federal law. Current polling shows that most voters support clear cryptocurrency rules.

Coinbase Vice President of Policy Kara Calvert said at Consensus 2026 that the Senate Banking Committee could take up the bill as early as the following week. The committee subsequently scheduled a markup for May 14 and voted to advance the CLARITY Act. The bill must still clear a full Senate vote, while lawmakers' dispute over crypto-asset ethics rules for government officials could affect the final timetable and bipartisan support.

The CLARITY Act aims to establish a regulatory framework for the U.S. crypto asset market and clarify the division of oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Whether the bill can address stablecoin yield and rewards will affect the interests of banks and companies including Coinbase and Circle, while helping shape the institutional direction of the U.S. crypto market.

The U.S. Senate Banking Committee has released its latest draft and held a key hearing, with only 24 hours remaining before the deadline for submitting amendments. Bipartisan lawmakers are nearing a compromise over stablecoin yield, and the bill is expected to enter markup on May 11. The draft has also been sent to the White House for review. White House crypto adviser Patrick Witt is targeting passage by July 4. The developments helped push Bitcoin above $78,000, while Circle shares rose about 18% in a single day.

The CLARITY Act seeks to define how oversight of crypto assets should be divided between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, making it a key piece of legislation for establishing federal market rules. The bill remains stalled over stablecoin yield provisions, with the crypto and banking industries still divided over interest, rewards and the impact on competition for deposits.

Republican Senator Thom Tillis urged the Senate Banking Committee to delay its review until May to allow more time for negotiations. The committee subsequently scheduled a markup for May 14, while Chairman Tim Scott had hoped to finish the process by May 21. However, the July 4 deadline passed without the bill clearing the hurdle, raising concerns that it may not pass before the November midterm elections.