CLARITY Act Advances in Senate as Stablecoin Compromise Takes Shape

The Digital Asset Market Clarity Act would divide oversight of digital assets between the Securities and Exchange Commission and the Commodity Futures Trading Commission, creating federal rules for tokens, trading platforms and decentralized finance. The House passed H.R. 3633 by 294-134 on July 17, 2025. Its fate now rests with the Senate, where passage would mark the most consequential rewrite of U.S. crypto market regulation and shape how exchanges, issuers and developers operate.

The Senate Banking Committee advanced the bill 15-9 on May 14, but lawmakers still must reconcile Banking and Agriculture Committee texts and resolve disputes over government ethics, stablecoin yield and protections for DeFi developers. The White House reportedly sent an ethics package to selected Republican senators on July 20, reviving hopes for action. Democrats had not participated in that agreement, however, and leaders face a rapidly narrowing window to assemble 60 votes and secure floor time before the Senate’s August recess.

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 Digital Asset Market Clarity Act of 2025 aims to establish consistent rules for the U.S. cryptocurrency spot market and clarify the regulatory roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission. Covering token classification, trading-platform compliance and stablecoin yield arrangements, the bill is seen as a key step in U.S. digital-asset market structure legislation.

The U.S. Senate Banking Committee has scheduled a May 14 markup of the bill, reviving a market structure overhaul that had stalled. A compromise on stablecoin yields and regulatory jurisdiction has won support from several crypto industry leaders. However, lawmakers remain divided over political ethics and several amendments, leaving uncertain whether the bill can advance to a vote by the full Senate.

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 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 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 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.

US cryptocurrency regulation has long relied on securities and commodities laws as well as regulators’ discretion, leaving the boundaries around token classification and developer liability unclear. Nonprofit advocacy group Coin Center says the CLARITY Act is intended to establish a framework for classifying digital assets and provide statutory protections for noncustodial blockchain developers, determining whether the industry can operate under predictable rules.

As of July 20, 2026, the CLARITY Act and related blockchain legislation remained stalled in the US Senate, with provisions including stablecoin yield among the disputed issues. No specific amount is involved. Coin Center warned that unless Congress explicitly limits regulatory discretion, future administrations could change their enforcement stance and take tougher measures against cryptocurrency companies and developers.