- The Senate Banking Committee advanced the Clarity Act 15-9, establishing the CFTC as the primary regulator for most of the crypto industry while leaving digital securities oversight with the SEC.
- The bill now heads to the Senate floor, where it must be merged with a separate Agriculture Committee version; it would then still need another House vote after the lower chamber passed its own version in 2025.
- A bipartisan compromise was reached on stablecoin rewards: crypto firms may offer rewards for using stablecoins for payments and transactions, but not for activities resembling traditional bank deposits — a key concession to banking groups worried about deposit flight.
- Remaining hurdles include a bipartisan ethics provision targeting government officials (including Trump) profiting from crypto, and stronger consumer protection and software developer prosecution provisions demanded by some Democrats.
What Happened?
The Senate Banking Committee voted 15-9 Thursday to advance the Clarity Act, a landmark digital asset market structure bill that would give the Commodity Futures Trading Commission primary regulatory authority over most of the crypto industry while preserving SEC jurisdiction over digital securities. The vote — brokered through months of negotiations led by Senators Thom Tillis and Angela Alsobrooks — resolves the key stablecoin rewards dispute that derailed an earlier January vote when Coinbase CEO Brian Armstrong withdrew his support. The compromise allows crypto firms to offer stablecoin rewards for payments and transactions but bars rewards for activities resembling traditional account deposits, addressing bank lobbying groups’ concerns about deposit flight and lending capacity.
Why It Matters?
A clear regulatory framework for digital assets has been the crypto industry’s top legislative priority for years. The absence of one has forced companies to navigate a patchwork of SEC enforcement actions and legal uncertainty that has pushed some offshore. The Clarity Act would resolve the foundational question of who regulates what — a CFTC-primary model favored by crypto firms, which view the futures regulator as more accommodating than the SEC. For traditional finance, the stablecoin rewards compromise matters: banking groups had warned that unrestricted rewards would drain deposits from banks into crypto wallets, impairing the lending system. The bill’s ethics provisions, targeting officials including Trump whose family wealth has been substantially transformed by digital assets, remain the most politically contentious element.
What’s Next?
The bill heads to the Senate floor, where it must be reconciled with the Agriculture Committee’s version, which has CFTC jurisdiction overlap. Even if it clears the Senate, the House passed its own separate version in 2025, meaning a conference process or second votes will be required. The bipartisan ethics provisions and consumer protection demands from some Democrats are the biggest near-term obstacles to gathering the 60 votes needed to advance past a filibuster. White House involvement in shaping those provisions will be closely watched given Trump’s personal financial exposure to the crypto sector.
Source: Bloomberg
