How the CLARITY Act Could Help Crypto Get the Rules It Has Needed

The CLARITY Act cleared a major legislative hurdle on May 14, 2026, when the US Senate Banking Committee voted 15-9 to advance the Digital Asset Market Clarity Act of 2025 to the full Senate. The vote, which followed the release of a 309-page draft just days earlier, gives the crypto industry its clearest shot yet at a comprehensive federal regulatory framework in the United States.

What Just Happened With the CLARITY Act?

The Senate Banking Committee released the latest version of the CLARITY Act just after midnight on Tuesday, May 12, ahead of a formal markup session later that week. The draft had grown significantly since earlier versions. 

Chairman Tim Scott acknowledged the bill had grown substantially through negotiation, noting that since June of last year, lawmakers had added 33,000 words and 219 pages to get the legislation "as bipartisan as humanly possible."

The Senate Banking Committee largely voted along party lines at 15-9, with Democratic Senators Ruben Gallego of Arizona and Angela Alsobrooks of Maryland joining all Republicans on the panel to vote for the bill.

This follows an earlier milestone. The CLARITY Act passed the House of Representatives on July 17, 2025, by a 294-134 bipartisan vote, with all 216 Republicans in support and 78 Democrats crossing the aisle.

How Does the Bill Divide Crypto Regulation?

The core of the CLARITY Act is a three-bucket classification system. Under the draft, the SEC would oversee most initial token sales and offerings treated as digital asset securities. The CFTC would regulate spot trading of "digital commodities," which covers tokens that reach a mature or sufficiently decentralized state. Payment stablecoins would sit under a mix of Federal Reserve and state supervision, reflecting their closer link to banking and payments.

Bitcoin and Ether, as sufficiently decentralized networks, would sit under CFTC oversight. A new token still controlled by a founding team would remain under SEC rules until it meets decentralization criteria, at which point it can migrate to the CFTC track.

The Stablecoin Yield Debate

One of the most contested sections involves stablecoin rewards. The latest version added new language on stablecoin rewards through a Tillis-Alsobrooks compromise, which restricts passive, deposit-like yield on payment stablecoins while leaving room for certain transaction-based rewards under tighter oversight. Banks pushed hard against any form of yield, warning it could drain deposits from the traditional financial system.

DeFi Developer Protections

The bill maintains legal protections for decentralized finance (DeFi) developers, keeping that corner of the crypto sector satisfied for now. DeFi refers to financial services that run on public blockchains without a central company controlling them, like decentralized exchanges and lending protocols. The Senate version included the Blockchain Regulatory Certainty Act, which provides safe harbors for software developers.

What Still Needs to Happen Before This Becomes Law?

The path forward involves several steps that could each prove difficult.

• The bill must still pass the full Senate, align with the House version, and receive the president's signature.
• The bill must be merged with a separate version from the Senate Agriculture Committee before a full Senate vote, which can only take place with the support of 60 members.
• Even after passage, the framework would still require extensive SEC-CFTC rulemaking before becoming fully operational.

The bill is championed by Coinbase, Circle, and Ripple, which want a degree of regulation and oversight of their industry to encourage investors. Venture capital firm Andreessen Horowitz is another key supporter. On the other side, banks, unions, and law enforcement agencies oppose the measure, arguing various provisions would hurt consumers and endanger financial systems.

Markets reacted positively after the committee vote, with Bitcoin and Ethereum both moving higher, while Hyperliquid rose around 11% and XDC and Canton gained nearly 10%.

Conclusion

The CLARITY Act has now cleared the House with 294 votes and the Senate Banking Committee with a 15-9 margin. The 309-page bill creates three defined regulatory categories for digital assets, assigns the CFTC jurisdiction over sufficiently decentralized tokens, restricts passive stablecoin yield, and protects DeFi developers. It still requires 60 Senate votes, reconciliation with the Agriculture Committee version, and a presidential signature before any of it becomes enforceable law.

Resources

1. CoinDesk Clarity Act, in the Flesh, Unveiled by U.S. Senate Banking Committee Before Hearing.
2. Congress.gov Text: H.R.3633, Digital Asset Market Clarity Act of 2025, 119th Congress.
3. CNBC Crypto Industry Scores Win as Clarity Act Regulation Bill Clears Senate Hurdle.
4. Yahoo Finance CLARITY Act Clears Senate Banking: What Comes Next?
5. Bitcoin Magazine Senate Banking Committee Opens Historic Crypto Bill Markup as Warren, Republicans Clash Over CLARITY Act Amendments.
6. Finance Magnates Breaking: CLARITY Act Draft Gets Green Light in Senate.
7. BanklessTimes U.S. Senate Banking Committee Releases Crypto Clarity Act Draft.
8. Latham & Watkins U.S. Crypto Policy Tracker: Legislative Developments.
9. Elliptic Crypto Regulatory Affairs: CLARITY Act Advances from Senate Banking Committee.
10. DeFi Rate CLARITY Act Updates: Passed Senate 15-9 Vote.
11. FinTech Weekly What Is the CLARITY Act? The U.S. Crypto Bill That Could Reshape Digital Asset Regulation.
12. CryptoTimes CLARITY Act Timeline: From 15-9 Senate Win to July 4 Signing, Here Is Every Step Ahead.
13. Bitcoin Magazine Senate Schedules CLARITY Act Markup as Banking Lobby, Democrats Mount Resistance.
14. Arnold & Porter Clarifying the CLARITY Act: What to Know About the House Crypto Market Structure Bill and Its Path to Law.