Clarity Act Hits Senate Committee for Historic Markup Vote

The committee’s executive session starts at 10:30 a.m. ET. All 24 senators on the panel will review the 309-page bill. More than 100 amendments await consideration. Coinbase CEO Brian Armstrong called it “a big opportunity to move America’s financial system forward” in an X post earlier today.

What the Clarity Act Does

The bill, formally H.R. 3633, draws a line between SEC and CFTC authority. Tokens sold through investment contracts fall under SEC oversight initially. Once a blockchain passes the “mature blockchain” test, the token shifts to CFTC jurisdiction.

That maturity test hinges on decentralization. No single entity can control more than 20% of the network. The code must run as open source. Ownership must spread across many holders. Tokens meeting those criteria become “digital commodities” under CFTC rules.

The bill also creates safe harbors for non-custodial DeFi protocols and node operators. Developers who do not control user funds avoid money transmitter classification. Anti-CBDC language bars the Federal Reserve from issuing digital currency to individuals.

How the Bill Got Here

Rep. J. French Hill (R-AR-2) introduced the bill on May 29, 2025. The House passed it on July 17, 2025, by a 294-134 bipartisan vote. That made it the successor to FIT21, which stalled in the Senate.

The Senate path proved more complex. The Agriculture Committee advanced its portion in January 2026. Meanwhile, the Banking Committee delayed its markup over stablecoin-yield disputes.

Months of negotiations followed. Sen. Thom Tillis (R-NC) and Sen. Angela Alsobrooks (D-MD) brokered a yield compromise. The deal bans passive interest on payment stablecoins. Instead, it allows activity-based rewards. That agreement cleared the path for today’s vote.

The Stablecoin Yield Fight

Stablecoin yield became the most contentious issue in the bill. The American Bankers Association warned that interest-bearing stablecoins could trigger deposit flight. The ABA sent thousands of letters opposing the provision, according to CoinDesk.

Armstrong pushed back. On May 12-13, he said, “Not everyone got everything they wanted, but they got the must-haves. We met the asks of the bank lobby and the Senate.” Chairman Tim Scott (R-SC) said the bill sits “in the red zone.”

Sen. Elizabeth Warren filed more than 40 amendments targeting stablecoins, ethics, and DeFi. Consumer groups argue the bill weakens protections against illicit finance, according to Americans for Financial Reform.

What the SEC and CFTC Split Means

The Clarity Act tackles a core problem in U.S. crypto regulation. For years, the SEC and CFTC have clashed over token jurisdiction. That clash led to enforcement actions instead of clear rules.

Under the bill, the SEC retains authority over initial token offerings. Projects raising capital through investment contracts follow SEC disclosure rules. That covers the fundraising phase.

Once a blockchain decentralizes, the token transitions to CFTC oversight. Exchanges trading digital commodities register with the CFTC. The bill creates expedited registration pathways to ease that process.

For projects and exchanges, this brings regulatory certainty. For DeFi developers, the safe harbors allow building non-custodial protocols freely.

Market Reaction Ahead of the Vote

Crypto markets traded firm ahead of the markup. Bitcoin consolidated near $79,000-$80,000 as of May 13, per market data. Spot Bitcoin ETF inflows stayed strong in early May. Weekly flows ranged from $532 million to $857 million, per Disruption Banking.

Coinbase shares (COIN) rose about 4% in recent sessions. Citi analysts project a $143,000 BTC base case for 2026. That forecast assumes $15 billion in annual ETF inflows and clearer regulation.

No one has directly tied on-chain movements to today’s vote. Broader inflow trends reflect general optimism about U.S. crypto policy.

What Happens After Today

Today’s markup is a committee vote, not a full Senate floor vote. If it advances, the bill moves to the full Senate. Then it needs reconciliation with the Agriculture Committee’s version and the House bill.

The White House targets a July 4 signing for crypto legislation. That timeline is tight. A full Senate vote would need to happen by July, before the August recess.

More than 100 amendments could reshape key provisions today. Warren’s amendments will signal how much Democratic support the final bill can attract.

This is not financial advice. Regulatory outcomes remain uncertain. Investors should weigh their own risk tolerance before acting on legislative expectations.