The U.S. Senate Banking Committee will mark up the 309-page Digital Asset Market Clarity Act — commonly known as the CLARITY Act — at 10:30 AM ET on May 14, 2026. The vote is the single most consequential crypto-regulatory event since the House passed the bill 294-134 in July 2025. It has stalled...
"There will be no one voting for this bill if we don't have an ethics provision. We cannot allow members of Congress, senior administration officials, presidents, or vice presidents to get rich off these industries because of their insider status." — Senator Kirsten Gillibrand (D-NY), Speaking at Consensus 2026 Miami
The U.S. Senate Banking Committee will mark up the 309-page Digital Asset Market Clarity Act — commonly known as the CLARITY Act — at 10:30 AM ET on May 14, 2026. The vote is the single most consequential crypto-regulatory event since the House passed the bill 294-134 in July 2025. It has stalled in the Senate for ten months.
Three fault lines threaten passage. First, the banking industry has formally rejected the Tillis-Alsobrooks stablecoin yield compromise, calling activity-based rewards "economically indistinguishable from interest." Second, Senate Democrats are conditioning floor votes on an ethics provision barring senior government officials from profiting off crypto — a provision absent from the current 309-page text. Third, five major labor unions, including the AFL-CIO and its 12.5 million members, have written to senators warning the bill "jeopardizes the stability of workers' retirement plans." The committee splits 13 Republicans to 11 Democrats. All 13 Republican votes are needed for committee clearance. A full Senate floor vote requires 60 — meaning at least seven Democrats must cross the aisle.
Polymarket traders assign a 73% probability to the CLARITY Act becoming law in 2026, up from 46% at the start of May but down from 82% in February. The White House is targeting a July 4 signing. Senator Gillibrand has predicted completion by the first week of August.
The substitute text released on May 12 by Chairman Tim Scott (R-SC), Senator Cynthia Lummis (R-WY), and Senator Thom Tillis (R-NC) spans nine titles. According to the Senate Banking Committee, it "reflects serious, good-faith work across the Committee" and "delivers the certainty, safeguards, and accountability Americans deserve."
The bill's core mechanism divides crypto assets into three regulatory categories and assigns oversight accordingly. It folds in two previously standalone bills: the Blockchain Regulatory Certainty Act, which exempts blockchain developers from money transmitter classification, and the Keep Your Coins Act, which protects self-custody rights. Committee members had until close of business May 13 to file amendments ahead of Thursday's markup.
The House passed its version of the bill, H.R. 3633, on July 17, 2025, by a 294-134 vote. All 216 House Republicans voted in favor; 78 Democrats crossed the aisle. If the Senate version passes, the two chambers will need to reconcile their texts before sending a final bill to the president.
Under §103 of the bill, crypto assets are classified into three categories:
Digital Commodities. Tokens whose value is "intrinsically linked" to the use of the blockchain to which they relate. To qualify, no insider group can control more than 20% of voting power or hold more than 20% of token supply. The CFTC receives exclusive jurisdiction over anti-fraud and anti-manipulation enforcement in digital commodity spot markets. Exchanges, brokers, and dealers handling digital commodities must register with the CFTC.
Investment Contract Assets. Tokens sold through initial offerings or structures resembling securities. The SEC retains oversight. This category covers most initial token sales and project fundraising rounds.
Permitted Payment Stablecoins. These fall under a combination of Federal Reserve and state supervision, reflecting their proximity to banking and payments infrastructure. The stablecoin provisions are the bill's most contested section.
The SEC and CFTC issued joint comprehensive guidance in March 2026, according to a Morgan Lewis analysis, effectively previewing how the agencies would interpret the statutory framework if enacted.
The final major sticking point before the bill text dropped was stablecoin yield. On May 1, Senators Tillis and Alsobrooks released a bipartisan compromise after months of negotiations facilitated by the White House.
The deal prohibits passive yield on stablecoin balances — the kind of automatic interest a money-market fund pays. It permits limited "activity-based rewards" tied to specific user actions: making payments, completing transfers, or participating in platform programs. Joint rules from the SEC, CFTC, and Treasury would govern the distinction.
The banking industry rejected this framework on May 9. The American Bankers Association (ABA), the Bank Policy Institute (BPI), and the Independent Community Bankers of America (ICBA) sent a formal letter to every member of the Senate Banking Committee, according to reporting by Bloomberg. Their argument: activity-based rewards on stablecoins are functionally equivalent to interest and would trigger deposit flight from checking accounts into yield-bearing stablecoin wallets.
ABA CEO Rob Nichols escalated on Sunday, May 11, sending a letter to every bank CEO in the country asking for "immediate engagement" on stablecoin yield policy, according to Bitcoin Magazine. A Baker McKenzie analysis published May 5 described the compromise as creating a "meaningful but narrow" carve-out, noting the high compliance burden would limit its practical use to the largest stablecoin issuers.
The 309-page text contains zero crypto ethics provisions. According to CoinDesk, this omission is now "the only thing standing between this bill and President Trump's desk" — and simultaneously the reason it may never reach the president's desk.
The conflict-of-interest question has been active in CLARITY negotiations since September 2025, when twelve Senate Democrats released a market structure framework demanding ethics guardrails. According to CoinDesk and The Block, the Trump family has accumulated at least $1.4 billion in gains from crypto-related ventures during the current administration, including the World Liberty Financial DeFi protocol and the TRUMP memecoin.
Senator Gillibrand stated at Consensus 2026 in Miami that CLARITY needs a provision barring senior government officials from profiting off the industry while regulating it. Senator Adam Schiff (D-CA), who joined the Banking Committee in 2025, is reportedly demanding provisions specifically addressing the Trump family's crypto dealings, according to CryptoSlate.
The structural dilemma: a Trump-targeted ethics provision would trigger a White House veto threat, as the president has publicly framed crypto policy as a 2026 deliverable. But without an ethics provision, Democrats may withhold the votes needed for the 60-vote Senate floor threshold.
The most organized labor opposition to any crypto legislation arrived two days before the markup. At least five unions sent letters to lawmakers: the AFL-CIO, the Service Employees International Union (SEIU), the American Federation of Teachers (AFT), the National Education Association (NEA), and the American Federation of State, County and Municipal Employees (AFSCME).
According to the AFL-CIO letter, cited by Crypto Times, the unions warned that the bill "jeopardizes the stability of workers' retirement plans, including public pensions, and introduces significant volatility to retirement savings accounts." The core concern: the intersection of the CLARITY Act with President Trump's February 2026 executive order clearing pension funds and retirement accounts to hold cryptocurrency assets.
The AFL-CIO, representing over 12.5 million members, carries substantial influence with Democratic senators — precisely the votes the CLARITY Act requires to clear 60 on the Senate floor. According to Crowdfund Insider, this represents the most significant labor intervention in crypto legislation to date.
Title VI of the bill includes provisions aimed at protecting software developers and decentralized protocol participants. Key elements:
According to an analysis by Hodder Law, the bar for "fully decentralized" status is high. Protocols with admin keys, upgradeable contracts, or founding team governance dominance likely will not qualify.
Committee level (May 14): The Senate Banking Committee has 24 members — 13 Republicans, 11 Democrats. All 13 Republican votes are required for passage. A single Republican defection kills the bill in committee. According to CoinDesk, Chairman Scott locked in all 13 Republican votes by April 30.
Senate floor: Passage requires 60 votes to overcome a filibuster. With 53 Republican senators, the bill needs at least 7 Democrats. The ethics provision fight directly threatens this count.
Reconciliation with the House: If the Senate passes its version, the two texts must be reconciled. The House version passed in July 2025 with 78 Democratic votes. Differences between the two chambers' stablecoin provisions and the presence or absence of ethics language will need resolution.
Prediction markets: Polymarket odds for the CLARITY Act becoming law in 2026 hit 82% in February, crashed to 46% by late April amid amendment disputes and delays, and have rebounded to 73% as of mid-May, according to BeInCrypto.
Political pressure: Stand With Crypto, representing 2.9 million advocates, confirmed it will publicly score every senator's vote on Thursday, according to Bitcoin.com News. The scorecard will be tied to senators' recorded positions and published immediately after the session.
The CLARITY Act's economic significance extends beyond regulatory clarity. The bill would establish the first comprehensive U.S. legal framework for digital asset trading, directly affecting:
Bitcoin traded at approximately $81,700 on May 12, having rallied 17% over the preceding 30 days to close above $80,000 for the first time since January, according to Yahoo Finance. How much of that rally is attributable to CLARITY Act momentum versus broader macro factors — including a potential Federal Reserve rate-cut path firming at the June FOMC — is unclear.
The CLARITY Act markup on May 14 is a committee-level gate, not a finish line. Even if all 13 Republicans hold and the bill clears committee, the path to 60 Senate floor votes runs directly through the ethics provision standoff. Democrats have a structural leverage point — they can support the bill's substance while conditioning votes on anti-corruption language the White House opposes. The banking industry's formal rejection of the stablecoin yield compromise adds a second pressure vector that may generate amendment fights during the markup itself. Labor opposition introduces a third variable that complicates Democratic vote calculus.
The bill's legislative architecture — three-bucket classification, CFTC spot market jurisdiction, DeFi safe harbors — represents the most detailed attempt at U.S. crypto market structure legislation to date. Whether it survives the political dynamics surrounding it is a separate question from whether its regulatory framework is sound. The next 48 hours will determine whether the CLARITY Act advances to its next obstacle or returns to the drafting table for a third time.