Senate to vote on Clarity Act draft

Crypto policy is back in the Senate, and this time there is actual bill text on the table. Senate Banking Republicans released a 309-page draft of the Digital Asset Market Clarity Act on May 12, with a committee markup set for Thursday, May 14, at 10:30 a.m. in Dirksen 538. That matters because crypto firms have spent years stuck between the SEC and CFTC, never fully sure which rulebook applied. This draft is an attempt to draw the map. ### What is happening Thursday? It is not a full Senate floor vote yet. It is a Senate Banking Committee executive session — basically the stage where senators debate amendments, rewrite sections, and decide whether the bill advances out of committee. That distinction matters because a lot can still change before anything reaches the full Senate. (banking.senate.gov) ### What does the bill actually try to do? At the core, the draft tries to settle the biggest crypto fight in Washington: when a token is treated like a security and when it is treated more like a commodity. The framework would divide authority between the SEC and CFTC, create tailored disclosure rules for some token sales, and add a new exemption from SEC registration called “Regulation Crypto.” It also includes anti-evasion rules and resale restrictions aimed at insider dumping. (banking.senate.gov) ### Why do firms care so much? Because right now the U.S. system is messy enough that launching a token, exchange feature, or on-chain product can mean guessing which regulator shows up first. The CLARITY draft is trying to replace that with a statutory framework — not just enforcement actions and court fights. For exchanges, token issuers, and custody firms, that could change compliance planning, listing decisions, and product timelines pretty quickly if the bill survives. (banking.senate.gov) ### Why is stablecoin yield the flashpoint? Turns out the hardest fight is not the SEC-CFTC split. It is whether stablecoin issuers and platforms can offer rewards that look too much like bank interest. Recent negotiations produced a compromise that blocks rewards that are economically equivalent to deposit interest but still leaves room for some activity-based incentives. Banks hate that because they see it as competition for deposits. (banking.senate.gov) Crypto backers see it as the minimum needed to keep stablecoins useful. ### What else is inside the draft? The bill is not just about token labels. It also adds illicit-finance provisions — AML programs, customer identification, recordkeeping, suspicious activity reporting, sanctions obligations for some U.S.-operated front ends, and a law-enforcement safe harbor for pausing suspicious transactions. There is also a whole DeFi title, which shows the Senate is trying to write rules for decentralized systems without simply banning the software layer. (forbes.com) ### Why are Democrats still uneasy? The biggest political problem now is ethics. Elizabeth Warren attacked the new text on May 12 for leaving out provisions aimed at preventing President Donald Trump and his family from benefiting from crypto conflicts of interest. So even if negotiators narrowed the stablecoin dispute, the coalition problem is not solved. The markup could become less about technical market structure and more about whether Republicans accept ethics amendments. (banking.senate.gov) ### Has this already moved in the House? Yes — that is part of why the Senate draft matters. H.R. 3633 already exists, and House committees advanced it last year with bipartisan support. So the Senate is not inventing the issue from scratch. It is deciding whether Congress can finally turn a long-running crypto argument into an actual federal framework. (banking.senate.gov) ### Bottom line? Thursday is the first real test, not the finish line. If the committee advances the draft, crypto gets closer to the clearest federal rulebook it has had in the U.S. But the catch is simple — stablecoin economics and Trump-era ethics are now the pressure points that could still break the deal. (banking.senate.gov) (congress.gov)