The Senate Banking Committee has scheduled a markup hearing on the Digital Asset Market Clarity Act for Thursday, May 14 at 10:30 a.m. ET, according to CoinDesk. The vote marks the first formal committee action on the crypto industry's top legislative priority after months of stalled negotiations.
The CLARITY Act would establish clear jurisdictional lines between the SEC and CFTC over digital assets, creating a federal framework for how crypto firms register and operate. The House passed its version last July with a 294-to-134 vote. The bill has been stuck in the Senate since, primarily over how to treat stablecoin rewards.
The Stablecoin Compromise
A deal brokered by Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) cleared the main obstacle earlier this month. The compromise bans crypto firms from paying yield on stablecoin balances in a manner equivalent to bank deposits, but preserves the ability to offer activity-based rewards tied to actual platform use.
Coinbase, Circle, and the Blockchain Association quickly endorsed the language. Coinbase CEO Brian Armstrong posted "Mark it up" on X within hours of the text dropping. The exchange had pulled support for the bill in January over the yield issue and stood to lose substantial revenue if the provision went the other way.
Banks remain unhappy. The American Bankers Association and Bank Policy Institute warned the language still leaves room for deposit flight. They argue yield-earning stablecoins could shrink consumer, small-business, and farm loans by one-fifth or more.
Democrats Want Ethics Provisions
The larger question hanging over next week's vote is whether Democrats will support a bill that lacks conflict-of-interest guardrails. Senator Kirsten Gillibrand told the Consensus Miami conference that there will be "no one voting for this bill if we don't have an ethics provision." Her office cited CoinDesk-commissioned polling showing 73% of registered voters believe senior government officials should not have business ties to the crypto industry.
The concern centers on President Trump's family crypto ventures, which Democrats allege have generated billions in income since he took office. Senator Ruben Gallego, who has led Democratic ethics negotiations, indicated the provisions should be added in committee rather than deferred to the Senate floor. Senator Adam Schiff has framed the ask as a ban on federal employees, including the president, sponsoring, endorsing, or issuing digital assets.
Even Republican Senator Tillis has conditioned his vote on ethics language being included, according to multiple reports. Without him, the math for reaching the 60-vote threshold for cloture becomes difficult.
What Happens After Thursday
A committee markup is not the finish line. If the bill advances, it still requires a full Senate vote, reconciliation with the Senate Agriculture Committee's version (which passed in January), and then reconciliation with the House bill before reaching the president's desk. White House digital assets adviser Patrick Witt said at Consensus that the administration is targeting July 4 for House passage.
The timeline is tight. Senator Bernie Moreno (R-Ohio) previously warned that if the bill doesn't pass by the end of May, "digital asset legislation will not pass for the foreseeable future." Prediction markets currently put the odds of the CLARITY Act becoming law in 2026 at around 50%, down from above 80% earlier this year.
Whether the committee can produce a bill that satisfies both banking industry resistance and Democratic ethics demands will determine if the crypto industry gets its long-sought regulatory clarity or watches another legislative window close.
