Clarity Act Clears Senate Banking Committee, Advances To Full Senate

The Digital Asset Market Clarity Act cleared its Senate Banking Committee markup on May 14, sending the most consequential piece of US crypto legislation in years to the full Senate for a floor vote.

How the Vote Played Out

Chairman Tim Scott opened the session at 10:30 AM ET with all 13 Republicans aligned behind the bill. The final holdout, Senator John Kennedy, had committed his vote the day prior in exchange for a fiduciary duty provision for crypto participants and the attachment of the Build Now Act, a community housing bill he co-sponsored with Senator Elizabeth Warren.

Warren filed 44 of the more than 130 amendments tabled ahead of the markup. Members of the Senate Banking Committee filed over 130 proposed amendments ahead of the markup, with 44 coming from Senator Warren, while Senator John Kennedy, a key Republican holdout, confirmed he would support the bill. Each of Warren's amendments fell along a strict 13-11 party line. Her proposals on sanctions authority, retirement-account exposure, and bank supervisory records related to Jeffrey Epstein each failed by that same margin. Kennedy said he would have voted in favor of the Epstein-related amendment if the phrase "co-conspirators" was stripped from the text , but Chairman Scott moved on regardless.

One bipartisan moment emerged when Senator Mike Rounds' amendment to create an AI regulatory sandbox passed 15-9 with support from both sides of the aisle.

Markets React, But Road Ahead Is Long

Bitcoin jumped above $81,000 as the Senate Banking Committee held its key markup hearing. Coinbase surged more than 8% during the session as investors bet that regulatory clarity could unlock broader institutional participation in the sector. Polymarket odds of the CLARITY Act passing in 2026 repriced from the low 60s to 73% following Kennedy's Wednesday commitment.

The ethics provisions Democrats sought, targeting government officials with crypto ties, fall outside the Banking Committee's jurisdiction and were not included in the markup. Assuming the bill gets a nod from the panel, it still needs to be merged with a similar version approved by the Senate Agriculture Committee, and lawmakers must resolve the conflict-of-interest provision before a final version is ready for a full Senate vote, where 60 yes votes will be required, necessarily including a significant number of Democrats.

Committee Chairman Tim Scott has set a target of June or July 2026 for a full Senate floor vote, while the White House has marked July 4 as its goal for a presidential signature. The bill has already cleared the House. The CLARITY Act cleared the House of Representatives on July 17, 2025, in a 294-134 bipartisan vote.

Under the bill, the CFTC would receive exclusive jurisdiction over spot and cash markets for digital commodities, while the SEC retains authority over investment contract assets and primary market fundraising. The deal also prohibits yield on stablecoins that functions like a bank deposit rate but preserves room for what the bill terms "bona fide activities."

Sources:
CoinDesk: Senate Banking Committee Markup Liveblog
Fortune: Where Things Stand Going Into Senate Markup
US Senate Banking Committee: The Facts on the CLARITY Act