US CLARITY Act markup moves closer

TLDR

The US CLARITY Act, a major crypto market structure bill, is now on the verge of its first Senate Banking Committee markup after months of deadlock.

1. Draft text is circulating and multiple sources suggest a Senate Banking markup as early to mid May, with the bill described as back in the legislative red zone.
2. CLARITY would create a federal framework for digital asset markets and sharply restrict passive stablecoin yield, forcing changes to how centralized platforms and some DeFi yield products operate.
3. Passage is still uncertain, with unresolved ethics provisions and bank opposition, so the formal markup notice, amendments, and pre election timing are the key things to watch.

Deep Dive

1. How The Markup Got Closer

Reports say the Senate Banking Committee has circulated draft legislative text of the CLARITY Act to industry stakeholders ahead of a potential committee vote as soon as early May, with some sections still bracketed for negotiation on ethics and stablecoin rewards language. This draft circulation and talk of a notice to schedule markup are clear signs the bill is moving again after months of stalling over those issues.

Crypto policy speakers at Consensus Miami, including a Coinbase policy executive, have publicly said they expect a Banking Committee markup as early as next week, while a White House digital assets adviser has outlined a path of Banking markup in May, Senate floor vote in June, and final passage by early July if everything holds together. That White House adviser framed the bill as in the red zone of the legislative process, but stressed that delays of a few weeks could push action into a much less favorable election season window.

2. What CLARITY Would Actually Do

The CLARITY Act is a broad market structure bill that would define how US law treats digital assets, clarifying which tokens fall under the CFTC as digital commodities and which remain in SEC securities jurisdiction, building on a recent SEC CFTC token taxonomy release. It would create a registration and oversight regime for digital asset intermediaries, addressing trading venues, brokers, and custodians, and tightening broker reporting, including rules that could affect wash sale tax treatment and 1099 reporting for crypto transactions.

One of the most concrete changes is a compromise on stablecoin yield that would ban bank deposit like interest on stablecoin balances across exchanges and brokers, while allowing activity based rewards tied to spending or platform use rather than simple holding. That would likely force centralized platforms to redesign yield products around stablecoins and could push some revenue models toward fees and transaction driven rewards instead of passive interest. Analysts note that banks might respond by issuing their own compliant stablecoins, while non bank issuers and DeFi protocols would need to avoid structures that regulators view as economically or functionally equivalent to bank interest.

3. Remaining Hurdles And What To Watch

The markup is not guaranteed to happen, and even if it does, the bill must still clear the Banking Committee, the full Senate with at least 60 votes, and reconciliation with the House version that passed in 2025. Key unresolved points include ethics rules that would restrict senior officials, including members of Congress and administration leaders, from holding certain digital assets, which some senators insist must be included to secure votes.

On the industry side, large retail focused banks are lobbying against the current stablecoin rewards compromise, arguing it still leaves room for stablecoin products that compete with deposits, while many crypto firms worry that the same language could be too restrictive for innovation. At the same time, polls show majority voter support for clear crypto legislation, which increases political pressure to act.

Conclusion

The CLARITY Acts markup momentum means US market structure rules for crypto are closer than at any point in this cycle, but not yet locked in. If the current compromise on stablecoins and ethics holds through committee, the bill could significantly reduce regulatory uncertainty while narrowing room for passive stablecoin yield and tightening compliance expectations for centralized and some decentralized platforms. If talks slip or collapse, the industry likely remains under the current patchwork of enforcement actions and guidance for several more years.