The Digital Asset Market Clarity Act (H.R. 3633), passed by the U.S. House 294-134 in July 2025, faces a narrowing legislative window in the Senate. Senator Bernie Moreno (R-OH) has set an end-of-May 2026 ultimatum for the Senate Banking Committee markup. Senator Cynthia Lummis (R-WY) has stated ...
"There is more momentum than ever for a markup in May." — Cody Carbone, CEO, Digital Chamber
The Digital Asset Market Clarity Act (H.R. 3633), passed by the U.S. House 294-134 in July 2025, faces a narrowing legislative window in the Senate. Senator Bernie Moreno (R-OH) has set an end-of-May 2026 ultimatum for the Senate Banking Committee markup. Senator Cynthia Lummis (R-WY) has stated publicly that failure to act this session means waiting until at least 2030, when a new Congress would restart the process from zero.
The bill's passage would codify a three-category regulatory taxonomy — digital commodities, digital securities, and stablecoins — that the SEC and CFTC previewed in a joint 68-page interpretation on March 17, 2026. That interpretation classified 16 tokens including Bitcoin, Ethereum, and Solana as commodities, not securities. Without legislation, the classification remains agency guidance — persuasive but revocable.
Three unresolved fault lines threaten the markup: stablecoin yield treatment, where a Tillis-Alsobrooks compromise text released May 1 bans passive yield but permits activity-based rewards; ethics provisions targeting White House officials' crypto holdings, with Senator Tillis conditioning his vote on their inclusion; and CFTC funding, where the agency's $365 million FY2026 budget is insufficient for the spot-market oversight the bill assigns it.
The CLARITY Act's Senate path runs through two committees simultaneously — an unusual and complicating structure.
The Senate Banking Committee, chaired by Senator Tim Scott (R-SC), holds jurisdiction over the SEC-related provisions: token classification, securities registration exemptions, and stablecoin oversight. In January 2026, the committee released a 278-page draft bill incorporating the House-passed text with Senate modifications.
The Senate Agriculture Committee, chaired by Senator John Boozman (R-AR), advanced a companion bill — the Digital Commodity Intermediaries Act (S. 3755) — on January 29 by a 12-11 party-line vote. This bill establishes the CFTC's authority over spot digital commodity markets, registration requirements for exchanges, brokers, and dealers, and a 180-day timeline for the CFTC to create expedited registration pathways.
These two bills must be reconciled before floor action. The House version passed with bipartisan support (294-134); the Senate Agriculture Committee advanced its piece on a strict party-line vote — a gap that signals the difficulty of maintaining Democratic support.
The GENIUS Act, the federal stablecoin framework signed into law by President Trump on July 18, 2025, after passing the Senate 68-30 and the House 308-122, provides the definitional foundation for stablecoin provisions in the CLARITY Act. The market structure bill references GENIUS Act definitions for permitted payment stablecoins and issuers.
The bill's core mechanism is a classification framework. Digital assets fall into one of three buckets:
Digital Commodities — Assets intrinsically linked to a blockchain whose value derives from use of that blockchain. The SEC-CFTC joint interpretation of March 17, 2026 named 16 assets in this category: Bitcoin, Ethereum, Solana, XRP, Cardano, Chainlink, Avalanche, Polkadot, Hedera, Stellar, Litecoin, Dogecoin, Shiba Inu, Tezos, Bitcoin Cash, and Aptos. These fall under CFTC jurisdiction. The CFTC gains exclusive authority over anti-fraud and anti-manipulation enforcement in spot markets for these assets.
Digital Securities — Tokens that meet the Howey test or otherwise qualify as investment contracts. These remain under SEC jurisdiction with existing securities law applying.
Stablecoins — Defined per the GENIUS Act framework. Subject to joint SEC-CFTC oversight with specific issuer requirements.
The taxonomy also includes two additional sub-categories from the joint interpretation: digital collectibles (NFTs and similar non-fungible assets) and digital tools (utility tokens with functional network use).
The joint interpretation's legal status matters: it is an agency interpretation, not a formal regulation under the Administrative Procedure Act. It carries persuasive authority but can be revised or revoked by future agency leadership. Only statutory codification through the CLARITY Act would make the classification permanent.
The single issue that delayed the January markup was stablecoin yield. Banks argued that crypto firms offering yield on stablecoin holdings effectively replicated deposit-taking without banking licenses. Crypto firms countered that reward programs tied to platform activity differ fundamentally from interest on deposits.
On March 20, 2026, Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) announced a compromise in principle, backed by the White House. The compromise text, released publicly on May 1, 2026, draws a specific line:
The distinction mirrors traditional finance's separation between deposit interest (regulated under banking law) and credit card rewards or cashback programs (regulated under consumer protection law).
According to CoinDesk reporting on May 1, the compromise "blocks crypto firms from offering stablecoin yield offerings that look like bank deposits" while preserving reward mechanisms that crypto payments companies rely on for user acquisition.
Senator Tillis stated on April 29 that "the banks had enough time to make their case" and that the bill is ready for markup scheduling.
The Trump family's crypto holdings have introduced a bipartisan obstacle. World Liberty Financial, the Trump-affiliated project, launched the USD1 stablecoin and is pursuing a federal banking license. The family's combined crypto ventures exceed $1 billion in estimated value.
Senator Tillis — whose vote is mathematically necessary for committee passage — has conditioned his support on ethics language restricting White House officials from promoting or issuing digital assets. In January 2026, the Senate Agriculture Committee advanced its portion without Democratic support after Democrats objected to the absence of conflict-of-interest provisions. Senator Cory Booker (D-NJ) specifically cited what he termed "gryfto" rules — a portmanteau targeting Trump-family grift.
The ethics provision remains the most politically charged element of the negotiation. Industry groups have generally avoided public positions on the matter, recognizing that either outcome risks alienating key votes.
The CLARITY Act would grant the CFTC exclusive oversight of spot digital commodity markets — a massive expansion from its traditional derivatives-only mandate. The agency's current budget raises capacity questions.
Congress appropriated $365 million to the CFTC for FY2026. The agency has requested $410 million for FY2027 — a 12% increase — and wants 14 additional full-time staff, bringing total headcount to 650. The Senate Agriculture Committee's companion bill authorizes $150 million in supplemental funding and permits the CFTC to collect annual and volume-based fees from registered digital commodity intermediaries.
CFTC Acting Chair Brian Selig has stated that "the adoption of blockchain technologies, crypto assets, and smart contracts is introducing new methods for trading, clearing, settling, and collateralizing commodity price exposure," arguing the budget increase is necessary regardless of whether the CLARITY Act passes.
The funding gap is structural, not cosmetic. If the CFTC inherits oversight of spot markets for 16 classified digital commodities — assets with combined daily trading volumes in the tens of billions — a $45 million budget increase represents a fraction of what adequate supervision would require. By comparison, the SEC's FY2026 budget is approximately $2.2 billion.
Section 601 of the bill establishes explicit safe harbors for blockchain developers. Under the proposed Exchange Act §15H protections, developers are not subject to registration requirements solely because they:
Section 604 of the Senate draft adds that non-controlling developers and non-custodial service providers are not classified as money transmitters solely for building or maintaining software.
The framework's principle: regulate control, not code. Centralized intermediaries interacting with DeFi protocols face tailored risk-management, cybersecurity, and compliance standards. Developers writing open-source software do not.
This represents a significant departure from the Gensler-era SEC, which pursued enforcement actions against developers and interface operators. The March 2026 joint taxonomy explicitly excluded staking, mining, and airdrops from securities law — reversing prior enforcement positions.
The arithmetic is straightforward: the 119th Congress has limited working weeks remaining before the 2026 midterms shift congressional attention to campaigning.
If the markup does not occur by late May, the bill competes with must-pass legislation through the summer. If it misses the summer window, Senator Lummis has stated the next opportunity is 2030 — two Congresses away.
The House version passed with 294 votes, well above simple majority. Senate passage requires reconciling the Banking and Agriculture committee versions, securing 60 votes to overcome a filibuster (or attaching to a budget reconciliation vehicle), and navigating the ethics provision dispute. None of these is trivial.
On April 23, 2026, more than 120 crypto organizations sent a joint letter to the Senate Banking Committee demanding an immediate markup. Signatories included Coinbase, Circle, Kraken, Ripple, the Blockchain Association, Crypto Council for Innovation, Stand With Crypto university chapters, and multiple state blockchain associations.
The letter's core argument: agency action alone cannot provide stable rules. Only legislation prevents a return to regulation-by-enforcement. The coalition specifically cited three priorities:
The banking industry has taken a more cautious position. Trade groups including the American Bankers Association have argued that the GENIUS Act leaves loopholes in stablecoin yield regulation that the CLARITY Act must close. The Tillis-Alsobrooks compromise attempts to bridge this gap.
The CLARITY Act is the most consequential piece of crypto legislation pending in the U.S. Congress. It would permanently resolve the SEC-CFTC jurisdictional ambiguity that has defined American crypto regulation since the sector's inception. The stablecoin yield compromise released May 1 removed the last major substantive roadblock to a Banking Committee markup.
What remains is politics: the ethics provision dispute, the calendar squeeze before midterms, and the structural challenge of reconciling two committee versions for floor action. The 120-firm coalition letter, the Moreno deadline, and the Lummis 2030 warning all reflect an industry and its congressional allies recognizing that this legislative window is finite.
Whether the Senate acts in the next four weeks will determine if the United States gets a statutory framework for digital asset markets in 2026 — or waits until the next decade.