The Senate Banking Committee will mark up the Digital Asset Market Clarity Act on Thursday, May 14, the most consequential procedural step the bill has reached and the closest crypto market-structure legislation has come to a full Senate path. Committee Chair Tim Scott confirmed the executive session for 10:30 a.m. ET in the Dirksen Senate Office Building, less than a week after Senators Cynthia Lummis and Thom Tillis publicly urged the panel to advance the text. If the bill clears committee, it will become the first comprehensive framework defining how digital assets are policed by the SEC and the CFTC, a question the industry has fought over since the 2020 Ripple suit.
Market structure legislation refers to the body of federal rules that define which financial products are securities, which are commodities, and which agencies regulate the firms that issue, trade, and custody them.
Key Takeaways
- Senate Banking Committee will hold a markup vote on the CLARITY Act on May 14 at 10:30 a.m. ET, the bill’s first full committee vote.
- The bill draws a statutory line between SEC and CFTC jurisdiction and replaces the SEC’s enforcement-led approach to crypto.
- A Tillis-Alsobrooks compromise allows activity-based stablecoin rewards but bans yields functionally equivalent to bank-deposit interest.
- Six major banking trade groups are lobbying against the stablecoin language, calling it an avenue for deposit-flight evasion.
Published: May 11, 2026 09:00 UTC
What the markup vote means
Thursday’s session is an executive markup, which means committee members can debate, propose amendments, and vote the bill out of committee. A favorable vote sends the CLARITY Act to the full Senate floor; a defeat or withdrawal keeps it bottled up, likely past the August recess. Scott told the committee the bill aims to draw a “bright line” between SEC and CFTC authority and replace what he called the SEC’s “regulation-by-enforcement model” with a workable statutory framework.
The Digital Asset Market Clarity Act, originally introduced as H.R. 3633 in the House and now mirrored in the Senate, codifies how a token is classified. Centralized intermediaries fall under tailored cybersecurity, risk-management, and compliance standards. Software developers and peer-to-peer activity get statutory protections. The bill also requires payment stablecoins to be backed 1:1 with high-quality liquid assets and sets a federal floor for state-chartered issuers.
Why the stablecoin language is the fight
The bill’s most contested provision concerns rewards paid on stablecoin balances. Senators Thom Tillis and Angela Alsobrooks brokered language that prohibits payments “economically or functionally equivalent” to interest on a bank deposit, while permitting rewards tied to platform usage, governance participation, validation, or staking. The Block reported Coinbase Chief Legal Officer Paul Grewal endorsed the compromise as workable. The crypto industry calls it a “buy and use” model that preserves competitive payment products without recreating money-market funds.
Six banking trade groups disagree. In a joint letter, they argued the exceptions are broad enough to enable “evasion” of the deposit-interest prohibition, incentivizing customers to park balances in stablecoins rather than savings accounts. Tillis responded that he and Alsobrooks would “respectfully agree to disagree” with the bank lobby and proceed with the markup. Bloomberg reported the standoff has continued through the weekend without movement on either side.
What changes for crypto firms if the bill clears
For exchanges, custodians, and stablecoin issuers, the most immediate effect is regulatory certainty about which agency to register with. Tokens deemed digital commodities under the bill move to CFTC oversight, ending years of enforcement actions against secondary-market trading. Stablecoin issuers gain a federal pathway alongside state charters, mirroring the dual-track approach in the GENIUS Act passed last year.
For DeFi protocols, the carve-out for non-custodial software and peer-to-peer activity is significant. Developers who write open-source code without controlling user funds would not be classified as money transmitters or broker-dealers under the bill’s language. That codifies a position SEC Chair Paul Atkins has already articulated administratively but lacks statutory force. W3BN has previously covered Atkins’s onchain rulemaking proposals, which the CLARITY Act would now anchor in law.
The road after committee
A successful markup sends the bill to the Senate floor, where it would need 60 votes to overcome a filibuster. Industry lobbyists and crypto-aligned senators are targeting a floor vote before the August recess. House-passed language and Senate language will require reconciliation in conference, with the stablecoin yield provision and the scope of the CFTC’s expanded jurisdiction as the likely sticking points. Failure on Thursday delays committee action into the summer, which crypto policy groups have warned makes 2026 passage unlikely given the November election calendar.
Markets have largely priced in committee passage. Bitcoin held above $81,000 over the weekend, and Coinbase shares closed Friday up 4% on the markup announcement. The harder test arrives after the vote, when the bill’s actual amendments and any banking-industry-backed changes are public.
Frequently asked questions
What is the CLARITY Act?
The Digital Asset Market Clarity Act is bipartisan legislation that defines whether a cryptocurrency is a security under SEC oversight or a digital commodity under CFTC oversight. It also sets federal standards for stablecoin issuers and protects developers of non-custodial software from being classified as financial intermediaries.
When is the Senate Banking Committee vote?
The markup is scheduled for Thursday, May 14, 2026, at 10:30 a.m. ET in the Dirksen Senate Office Building. A successful vote sends the bill to the full Senate floor, where it would need 60 votes to overcome a procedural filibuster.
Why are banks opposing the stablecoin provisions?
Six banking trade groups argue the compromise language permitting activity-based stablecoin rewards could be used to mimic interest-bearing bank deposits, drawing customer balances out of insured accounts. The bill’s authors counter that rewards tied to platform usage, governance, or staking are distinct from passive yield on idle balances.
