CLARITY Act Returns to Senate as Crypto Bill Faces Banks, Democrats and A Tight Deadline

The Senate Banking Committee is taking up the CLARITY Act, the crypto market structure bill that would set federal rules for digital asset trading and decide how much authority the SEC and CFTC hold over the market.

The committee scheduled an executive session for May 14, 2026, at 10:30 a.m. to consider H.R.3633, the Digital Asset Market Clarity Act of 2025.

The bill has already passed the House. It’s a harder test is now in the Senate, where banks want tighter stablecoin language, several Democrats want stronger safeguards, and crypto firms are trying to protect a bill they see as the best chance for a national rulebook.

At stake is a simple legal problem that has dragged through court cases, agency actions, and industry lobbying: which digital assets are securities, which are commodities, and which regulator gets the final word?

What The CLARITY Act Would Change

The CLARITY Act would create a federal framework for digital commodities.

According to the Congress.gov bill summary, the measure gives the CFTC general authority over digital commodity transactions, including digital commodity exchanges, brokers, and dealers.

It also leaves the SEC with authority over certain digital commodity activity handled by securities brokers, alternative trading systems, and national securities exchanges.

For crypto exchanges, the bill offers a registration path. For token issuers, it offers a way to argue that a network has matured enough to move outside parts of securities law. For regulators, it would replace case-by-case fights with a statutory division of labor.

The House passed the CLARITY Act on July 17, 2025, by a 294-134 vote. Congress.gov lists the bill as passed by the House and referred to the Senate Banking Committee on September 18, 2025.

The Senate version is not a simple copy of the House bill. Senate Banking staff released a larger rewrite before the markup. Galaxy Research said the May draft is a 309-page substitute, up from a 278-page January draft, with new language on stablecoin yield, DeFi, developer protections, tokenization, and insolvency protections.

The markup will show whether the bill has enough support to move beyond committee. A bipartisan vote would give the bill a stronger chance on the Senate floor. A narrow party-line vote would leave the bill alive, but weaker.

The Stablecoin Fight Is Still The Main Obstacle

The biggest fight is over stablecoin rewards. Crypto firms want room to offer rewards connected to product use. Banks argue that stablecoin rewards could act like interest and pull deposits away from traditional bank accounts.

The stablecoin fight is not a side issue. It goes directly to how payment tokens would compete with bank deposits, money market products, and financial apps.

If the Senate narrows the rewards language too far, crypto firms may lose support for the bill. If it leaves the language too loose, banks may keep pressing senators to block or rewrite it.

Banks See A Deposit Threat

Banks have become one of the strongest sources of resistance to the current draft. Their argument is practical: if stablecoin issuers and crypto platforms can reward customers, deposits could move out of bank accounts and into token products.

Bloomberg reported that banks and crypto backers were fighting over the stablecoin language as senators prepared to take up the bill. Banking groups are pushing for tighter restrictions before the bill reaches the Senate floor.

Community banks have political leverage because they are local lenders in every state. Crypto companies have gained influence in Washington, but banks still have long relationships with members of Congress and state-level business groups.

Democrats Are Pressing On Ethics And Enforcement

Democratic support is the other major question. The bill needs more than Republican votes if supporters want a credible Senate floor path. That puts attention on Democrats who are open to crypto legislation but want stronger limits around conflicts of interest, illicit finance, and market abuse.

Forbes shared how the stablecoin compromise had moved into the text, while the next major fight concerned ethics rules. That issue has become harder to separate from the bill because crypto companies, political figures, and digital asset ventures now overlap more visibly than in earlier debates.

Democrats also have concerns about DeFi and criminal finance. The Senate draft tries to protect software developers and infrastructure providers, while preserving room for law enforcement when a person knowingly helps criminal money flows.

The question is whether that line satisfies senators who want tighter anti-money laundering rules.

Why Crypto Firms Still Want The Bill?

Crypto companies have spent years arguing that U.S. law has no workable category for many digital assets. They say the current system leaves exchanges and issuers exposed to enforcement actions without a clear registration path.

The CLARITY Act gives the industry something it has wanted for years: written standards for when a blockchain is mature or decentralized, rules for exchanges, and a larger CFTC role in digital commodity markets. It also gives firms a stronger argument that legal crypto trading should happen inside the United States rather than through offshore venues.

Axios reported that Democrats remained central to the bill prospects as the Senate Banking Committee prepared to weigh the measure. That is why crypto lobbyists are focused not only on Republicans, but also on a small group of Democrats who could make the committee vote look bipartisan.

What Investors And Exchanges Are Watching?

The market is watching the bill because it could change how major tokens, exchanges, and stablecoin products are treated under federal law. The bill would not end every lawsuit or every regulatory fight. It would, however, give firms clearer categories than they have now.

For exchanges, clarity comes with tradeoffs. Registration may bring institutional customers and public-market confidence. It may also bring higher legal costs, surveillance requirements, and tighter rules on customer assets.

More Than 100 Amendments Show The Bill Is Still Unsettled

Senators filed more than 100 amendments before the markup, according to CryptoNews reporting. That volume shows the bill has entered a negotiation stage, not a ceremonial vote.

The amendments are expected to test the same pressure points that have delayed the bill for months: stablecoin rewards, ethics, DeFi, customer protection, banking rules and the boundary between software activity and regulated financial intermediation.

A large amendment list also gives senators a way to record positions even if the final vote advances the bill. That matters because any bill that clears committee will still need floor time, 60 votes in the Senate, and agreement with the House version.

The Road After Committee Is Still Hard

Even if the Senate Banking Committee advances the CLARITY Act, the bill will not go straight to the president. Senate leaders would still need to put it on the floor. Supporters would need enough votes to overcome procedural hurdles. Differences between House and Senate language would need to be settled.

The Senate Agriculture Committee also has a role because CFTC authority sits within its jurisdiction. Any final package must satisfy senators who care about securities law, commodities markets, banking, stablecoins, DeFi, and anti-money laundering enforcement.

The CLARITY Act is not only a crypto bill. It is a test of how Congress wants digital finance to sit inside the U.S. financial system. Banks want guardrails that protect deposits. Crypto firms want legal categories that let them operate without constant agency fights. Democrats want more safeguards. Republicans want a bill that keeps innovation in the United States.

The Senate markup will not settle all of that. It will show whether the current draft has enough political support to move. If it does, the CLARITY Act becomes the main vehicle for the U.S. crypto market structure.

If it stalls again, the industry goes back to a familiar place: enforcement actions, agency rulemaking, and another round of lobbying for a bill that has already taken years to reach this point.