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The US Senate Banking Committee approved the CLARITY Act, a comprehensive crypto regulatory framework, yesterday.
Following intense lobbying from the crypto industry since its introduction in 2025, the bill will now move to the full Senate for further discussion and debate.
As reported by Cointelegraph, lawmakers considered over 100 proposed amendments while finalizing the bill’s language. These amendments addressed various topics, including ethical considerations, AI regulatory sandboxes, and stablecoin yield policies.
However, many of these amendments were ultimately rejected. Although two Democrats joined Republicans in supporting the measure, the vote largely followed party lines.
The bill’s prospects appear favorable, with strong Republican backing and some Democratic support. However, increasing political polarization ahead of upcoming elections could still cause delays in its passage.
CLARITY Advances from Committee Along Party Lines
Following yesterday’s session, Senator Tim Scott, who chairs the committee, declared “a successful bipartisan markup” as the bill prepares to move to the Senate floor.
Scott addresses the markup session. Source: US Senate
“After nearly a year of good-faith bipartisan negotiations, Senate Banking Committee Republicans and Democrats came together today,” he stated.
Despite Scott’s emphasis on bipartisanship, the actual vote was predominantly divided along party lines. All 13 Republican committee members voted to advance the bill, while all Democrats except Senators Ruben Gallego and Angela Alsobrooks voted against it.
Contrary to Scott’s message of cooperation, Senator Jack Reed noted that Republicans dismissed Democratic concerns about the bill. These concerns included how cryptocurrency could facilitate criminal activity and the president’s potential use of crypto projects for personal financial gain.
Indeed, the minority party issued a statement after the vote outlining their objections. They argued that the current version, as approved by the majority, fails to implement global anti-money laundering standards, exempts DeFi protocols from financial regulations, and doesn’t address loopholes for crypto mixing services.
Related: Who supports CLARITY on the US Senate Banking Committee?
While there are clearly some pro-crypto Democrats in Congress, the bill’s progress depends on them crossing party lines to vote against their own party’s majority position.
Currently, Republicans hold a 53-seat majority in the 100-seat Senate. To pass CLARITY, they need 60 votes, requiring at least seven Democrats to join them.
Republicans (red) hold a 53-seat majority in the Senate.
At last year’s Wyoming Blockchain Summit, Scott mentioned that 12 Democrats were open to the market structure bill, providing Republicans and crypto advocates with the necessary support to pass it.
However, this may no longer be accurate. The Congressional Progressive Caucus expressed opposition to any bill that could “allow the President and his family to enrich themselves, engage in corruption, and sell access to the White House through cryptocurrency.” Notably, CLARITY’s current draft does not include any such provisions.
Progressive organizations have urged lawmakers to address these concerns. A coalition including Americans for Financial Reform, Demand Progress Action, Indivisible, and Public Citizen sent a letter on May 8.
“A bill without strong ethics provisions increases the risks of defrauding consumers and investors, distorting and destabilizing financial markets, limiting competition, weakening long-standing investor protection laws, and undermining regulatory enforcement,” they wrote.
Ryan Cooper, a senior editor at progressive politics publication The American Prospect, even suggested that Democrats who supported the crypto industry should face primary challenges. “Allowing yourself to be influenced by the crypto lobby is unforgivable,” he wrote.
Ethics could become a politically sensitive and crucial issue as the bill is debated on the Senate floor.
Industry Remains Optimistic
Despite the largely partisan vote and ongoing ethics concerns, the crypto industry was generally positive about the May 14 markup session.
Javier Martinez, CEO and former chief legal officer at crypto trading platform sFOX, described the vote as a “major step toward resolving crypto’s regulatory identity crisis in the United States.”
Congress is “moving toward replacing regulatory uncertainty with a more defined legal framework. And markets respond to clarity,” he told Cointelegraph.
Ji Hun Kim of the Crypto Council for Innovation stated that the vote would enhance US competitiveness in the digital asset sector. CLARITY will “ensure that our country leads in digital assets policy and innovation,” he said.
Blockchain investor and Blockstreet COO Kyle Chasse commented, “This is the most significant regulatory moment in crypto since spot ETFs.”
Notably, the bill was delayed for months as banking and crypto lobbies debated whether stablecoins could offer yields. Banks argued this could trigger a significant outflow of deposits, threatening financial stability, while crypto advocates accused banks of suppressing competition.
The version that passed markup yesterday favored the banks’ position but would still permit crypto platforms to offer other activity-based rewards.
Nevertheless, pseudonymous crypto trader 10 Delta remarked, “The yield ‘ban’ is superficial & merely something for banks to claim as a victory.”
“It prohibits stablecoins from paying interest simply for holding them, like a savings account. But it explicitly allows stablecoins to pay rewards for using them: making purchases, lending, providing liquidity, or participating in any program.”
Ultimately, attention remains focused on the market. Alexander Lorenzo, founder and CIO of CoinPicks Capital, noted, “The last crypto bill to complete this process was the GENIUS Act in July 2025. Bitcoin reached an all-time high of $123,000 within weeks.”
“CLARITY is more comprehensive. It covers the entire crypto market, not just stablecoins.”
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