The Senate Banking Committee voted on May 14 to advance the Digital Asset Market Clarity Act after 10 months of Senate delays, sending the 309-page crypto market structure bill toward a full chamber vote. All 13 Republican members backed the bill in a party-line result, with Senator John Kennedy locking in his support the day before to secure the majority.

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How a Stablecoin Compromise Finally Broke the Clarity Act Deadlock

The House passed H.R. 3633 on July 17, 2025, with a 294-134 bipartisan vote. The bill stalled in the Senate Banking Committee almost immediately after, with disputes over stablecoin yield - whether issuers should be permitted to pass interest-like returns to holders - dominating months of negotiations.

The committee had scheduled a markup for January 15, 2026, but Chairman Tim Scott postponed it the day before after Coinbase CEO Brian Armstrong withdrew the exchange's support. The breakthrough came on May 1 when Senators Thom Tillis and Angela Alsobrooks reached a bipartisan compromise: passive yield on stablecoins is banned, but activity-based rewards tied to transactions, trading volume, or platform use remain permitted.

Three major banking trade groups - the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America - formally rejected the language on May 9. ABA members sent more than 8,000 letters to Senate offices in the four days before the vote.

Senate Clarity Act Markup: 309-Page Bill and the Kennedy Deal That Made It Through

The committee released the 309-page bill text after midnight on May 12. It draws a statutory boundary between SEC and CFTC jurisdiction: assets classified as commodities fall under CFTC oversight, while ancillary assets that function as securities stay with the SEC. Digital asset exchanges, brokers, and dealers must comply with Bank Secrecy Act requirements, including anti-money laundering programs, suspicious activity reporting, and sanctions compliance. Software developers publishing code without controlling customer funds receive explicit legal protections under the bill.

Senator Kennedy, the last uncommitted Republican before the markup, struck a deal with Chairman Scott on May 13. The agreement added a fiduciary duty provision for crypto industry participants and attached the Build Now Act - a community development housing bill Kennedy co-sponsored with Senator Warren - as Section 904 of the package. Polymarket odds of the Clarity Act passing in 2026 jumped from around 62% to 73% after Kennedy confirmed his support.

The committee debated more than 130 filed amendments during Thursday's session, nearly all submitted by Democrats. Senator Warren, the committee's ranking Democrat, said in her opening remarks that the bill "is just not ready," pointing to law enforcement gaps and the absence of an ethics provision. An amendment by Senator Chris Van Hollen that would bar senior government officials from holding business ties to crypto firms they regulate was not incorporated into the committee version.

Coinbase Up 8%, Bitcoin Above $81,000: Markets React to Clarity Act Vote

Crypto-related equities moved sharply during Thursday's session. Coinbase (COIN) gained more than 8% as investors bet that regulatory clarity would unlock broader institutional participation. Galaxy Digital (GLXY) rose 6.3%. Circle (CRCL), the USDC issuer, reversed an earlier 6% decline to finish the session up 1%. Bitcoin crossed $81,000 during the hearing.

For the wider industry, committee passage ends a decade of jurisdictional limbo between the SEC and CFTC. Exchanges, custodians, and DeFi protocols have operated without a clear legal line dividing securities oversight from commodities regulation. The bill also writes self-custody rights into federal statute, protecting individual holders who currently rely on agency interpretation.

The ethics provision - barring executive branch officials from profiting off crypto firms they oversee - remains unresolved. Democrats have signaled they will not support a final Senate floor vote without it. The White House has said it supports broad ethics rules but rejects language targeting a specific officeholder or office.

Clarity Act Next Steps: 60 Senate Votes, a Merger, and a July 4 Target

Before the full Senate can vote, the Banking Committee version must be merged with the Digital Commodity Intermediaries Act passed by the Senate Agriculture Committee on January 29 on a 12-11 party-line vote. The combined bill then needs 60 Senate floor votes, requiring at least 9 to 10 Democratic crossovers beyond the 51-seat Republican caucus.

The Senate enters Memorial Day recess on May 21, leaving less than a week for floor scheduling before summer. Chairman Scott has told Fox Business he hopes to bring the bill to a floor vote by June or July. Senators Cynthia Lummis and Bernie Moreno have both warned that missing the pre-recess window pushes the next viable legislative opening to 2030, after midterm elections reshape the chamber.

The White House has set July 4 - the U.S. 250th anniversary - as its target for a presidential signature. SEC Chair Paul Atkins stated on April 9 that both the SEC and CFTC are ready to implement the law once Congress delivers it to the president's desk.

The Clarity Act floor vote will set the rules for every U.S. crypto exchange and DeFi protocol. Follow each development in Web Snack - crypto policy coverage, no noise.

P.S. This article is for informational purposes only and does not constitute investment advice. Always conduct your own research and make independent decisions.