CLARITY Act draft advances US crypto regulation

TLDR

The CLARITY Act, a major US crypto regulation bill, has moved forward as the Senate Banking Committee released a 309-page draft and set a May 14 markup vote.

1. The draft would split oversight between the SEC and CFTC, tighten rules on stablecoin yields, and add protections for DeFi developers and banks using crypto.
2. It could lock in commodity treatment for key assets like Bitcoin (BTC) and potentially Ethereum (ETH), while imposing bank-style compliance on exchanges and brokers.
3. The bill still faces political hurdles in the Senate, including Democratic ethics and AML concerns, but prediction markets now price a high chance of passage by 2026.

Deep Dive

1. What Just Advanced

The Senate Banking Committee has published a new 309-page draft of the Digital Asset Market Clarity Act (CLARITY Act, H.R. 3633) and scheduled a May 14 committee markup, its first formal vote on the text.[](https://cryptoslate.com/clarity-acts-final-draft-has-been-released-ahead-of-may-14-markup-whats-in-it/)

The House already passed its version 294134 in July 2025, so this Senate markup is the key next step before any full Senate vote and eventual reconciliation between chambers.[](https://www.financemagnates.com/cryptocurrency/regulation/what-is-the-clarity-act-the-us-crypto-bill-that-could-reshape-digital-asset-regulation-this-week/)

Industry groups and policymakers view this as a pivot away from regulation by enforcement toward statutory rules for digital assets.[](https://news.bitcoin.com/us-senate-drops-309-page-crypto-clarity-act-draft-ahead-of-may-14-vote)

2. Core Rules In The Draft

The draft formally divides crypto oversight: the SEC would regulate new token sales and investment-contract style offerings, while the CFTC would oversee secondary trading of qualifying digital commodities on exchanges.[](https://news.bitcoin.com/us-senate-drops-309-page-crypto-clarity-act-draft-ahead-of-may-14-vote)

A contested section limits stablecoin yields. Rewards on idle, deposit-like stablecoin balances would be banned, but activity-based incentives (for example, payments or platform usage) remain allowed, with SEC, CFTC and Treasury tasked with joint rulemaking.?

The bill also:

1. Tightens AML/BSA rules by classifying digital commodity exchanges, brokers and dealers as financial institutions subject to bank-like compliance.?
2. Protects non-custodial developers and validators from being treated as money transmitters simply for writing code or running infrastructure, while keeping tools to target actual illicit finance.?
3. Gives banks statutory authority to use digital assets and blockchains in activities they are already permitted to perform, under prudential supervision.?

Separate provisions could effectively cement commodity treatment for assets that underpin US-listed spot ETFs and for tokens courts have already ruled are not securities, directly affecting BTC and likely ETH.?

3. Market Impact And What To Watch

For exchanges, brokers and custodians, CLARITY would mean clearer registration paths but also heavier, bank-like compliance, especially around AML and DeFi-related routing.[](https://news.bitcoin.com/us-senate-drops-309-page-crypto-clarity-act-draft-ahead-of-may-14-vote) For stablecoin issuers and yield platforms, banning passive interest on payment stablecoins could force business-model changes while preserving some activity-based rewards.?

For developers and DeFi protocols, explicit protections for open-source development and routine governance reduce legal overhang, but intermediaries that front-end or route through DeFi would still face new risk-management duties.?

Politically, the bill needs at least seven Senate Democrats to clear the 60-vote threshold. Key sticking points include ethics rules for officials crypto holdings and whether stablecoin rules still threaten bank deposits.? Despite this, prediction markets now price about a 75 percent chance the act becomes law in 2026, reflecting growing confidence in eventual passage.?

Conclusion

The CLARITY Acts draft release and imminent Senate Banking markup move US crypto policy closer to a comprehensive, statute-based framework.

If it survives political bargaining largely intact, the bill could lock in commodity-style treatment for major assets, standardize compliance for intermediaries, and reduce the regulatory fog that has shaped US crypto for years, while still leaving design details to future rulemaking.