The CLARITY Act (H.R. 3633), the most comprehensive U.S. digital asset market structure bill in history, faces a narrowing window for Senate passage before the August recess. The bill cleared the Senate Banking Committee 15–9 on May 14 and reached the Senate Legislative Calendar (Calendar No. 423...
"The banks will not accept it that way." — Jamie Dimon, Chairman & CEO, JPMorganChase
The CLARITY Act (H.R. 3633), the most comprehensive U.S. digital asset market structure bill in history, faces a narrowing window for Senate passage before the August recess. The bill cleared the Senate Banking Committee 15–9 on May 14 and reached the Senate Legislative Calendar (Calendar No. 423) on June 1, but three unresolved disputes — ethics provisions targeting officials' crypto holdings, law enforcement objections to developer safe harbors, and bank opposition to stablecoin yield rules — have stalled floor scheduling with roughly 31 session days remaining.
Polymarket odds on 2026 passage dropped to 47% from 74% one month prior. Galaxy Digital's Alex Thorn cut his estimate to 60% from 75% on June 5, citing calendar compression rather than substantive weakness. The bill needs 60 votes for cloture; Republicans hold 53 seats, requiring at minimum seven Democratic crossovers. Two Democrats voted for the bill in committee but signaled their floor support remains conditional on ethics language.
The stakes extend beyond regulatory clarity. A coalition of more than 200 crypto firms — including Coinbase, Ripple Labs, Kraken, Circle, and Andreessen Horowitz — sent a joint letter to Senate leaders Thune and Schumer on June 8 urging a vote without delay. JPMorganChase, Bank of America, and the American Bankers Association are lobbying against the bill's stablecoin provisions. The outcome will determine jurisdictional boundaries between the SEC and CFTC, the legal status of non-custodial developers, and whether stablecoin issuers can offer yield-like products outside banking regulation.
The Digital Asset Market Clarity Act creates a three-category taxonomy for digital assets, ending the jurisdictional ambiguity that has defined U.S. crypto regulation since the SEC began enforcement actions in 2017.
Digital Commodities — tokens whose value derives from the function of their underlying blockchain (Bitcoin, Ether, Solana) — fall under exclusive CFTC jurisdiction over spot and cash markets. This represents a significant expansion of CFTC authority into territory the SEC has historically claimed through enforcement.
Investment Contract Assets — tokens sold in centralized fundraising rounds where a team raises capital and promises to build a product — remain under SEC jurisdiction, consistent with existing Howey test application.
Stablecoins — dollar-pegged tokens — receive a separate regulatory category with joint SEC and CFTC oversight, building on the framework established by the GENIUS Act signed into law on July 18, 2025.
Section 604, the Blockchain Regulatory Certainty Act (BRCA), provides the bill's most contested provision: legal protections for non-custodial software developers and decentralized infrastructure providers, shielding them from classification as money transmitters for publishing code or maintaining open-source software.
Section 404 addresses stablecoin yield, prohibiting passive interest payments on dollar-pegged token balances while permitting activity-based rewards tied to payments and transfers — a compromise crafted by Senators Thom Tillis and Angela Alsobrooks.
The CLARITY Act's path to law runs through a compressed timeline:
Approximately 31 session days remain. The bill has not yet been merged with the Senate Agriculture Committee's companion text, the Digital Commodity Intermediaries Act, which cleared that committee separately. That reconciliation must occur before a floor vote.
Majority Leader John Thune has not publicly committed floor time. According to Galaxy Digital's Thorn, "committed floor time from Thune could improve odds significantly," but recent calendar losses — including the failed surveillance vote and anti-weaponization funding debates — have eaten into available days.
If the bill passes the Senate, it likely returns to the House for reconciliation with the original House version before reaching the President's desk.
The most politically charged obstacle involves Democratic demands for provisions governing elected officials' and federal employees' crypto holdings. The Trump family's approximately $2.3 billion in earnings from cryptocurrency ventures — including World Liberty Financial — has made this a first-order political issue.
Senator Chris Van Hollen (D-MD) proposed an amendment during markup that would have barred the president, vice president, and members of Congress from owning or participating in cryptocurrency businesses. It failed 13–11 on a party-line vote, with Senator Bernie Moreno (R-OH) arguing the amendment was procedurally out of order.
A subsequent closed-door meeting among Senators Gillibrand, Gallego, Moreno, and Lummis failed to produce an agreement. Republicans and the White House initially supported allowing state attorneys general to sue the DOJ over ethics enforcement failures but withdrew that position. The GOP's counter-offer — limiting enforcement authority to the U.S. Attorney General — was rejected by Democrats as "functionally circular."
Senator Ruben Gallego (D-AZ), who has led Democratic ethics discussions, has indicated the issue must be resolved in the committee-approved text rather than deferred to a floor amendment.
Section 604 of the CLARITY Act — the BRCA provision — became the subject of a 90-minute meeting at the Eisenhower Executive Office Building on June 11, hosted by White House crypto adviser Patrick Witt and the White House Crypto Council.
Attendees included representatives from the Fraternal Order of Police, National Association of Police Organizations, International Association of Chiefs of Police, National District Attorneys Association, and National Association of Assistant U.S. Attorneys. Treasury Department, FinCEN, and DOJ officials also participated. House Majority Whip Tom Emmer and White House AI and crypto czar David Sacks delivered opening remarks.
Law enforcement groups argue that broad safe-harbor language for non-custodial developers could weaken investigators' ability to pursue money laundering cases. Proponents counter that legal certainty for developers is necessary to prevent the continued offshoring of crypto innovation. A coalition letter from 60+ founders and CEOs — including leaders from Coinbase, a16z Crypto, Solana Labs, Uniswap, and Kraken — urged Congress to preserve the BRCA provisions intact.
Supporting their case: the U.S. share of global open-source blockchain development reportedly declined from 25% in 2021 to 18% in 2025, according to data cited in a coalition letter from 112 crypto organizations to the Senate Banking and Agriculture Committees.
The banking industry has mobilized against Section 404's stablecoin yield provisions. JPMorganChase CEO Jamie Dimon stated on May 29 that "the banks will not accept it" in its current form, arguing that allowing stablecoin issuers to offer yield-like products without bank-equivalent regulatory safeguards would "eventually blow up."
Bank of America CEO Brian Moynihan suggested Coinbase CEO Brian Armstrong should "just be a bank" if seeking to offer bank-like products. The American Bankers Association has lobbied senators to tighten the yield language, warning that yield-bearing stablecoins could substitute for insured deposits and drain funding for mortgages and business loans.
The Tillis-Alsobrooks compromise prohibits passive yield on dollar-pegged tokens but allows "bona fide activity" rewards. Banking groups argue this distinction is insufficient and have requested "important technical refinements" to close what they see as loopholes.
Senator Tim Scott has defended the bill's framework as one that "protects consumers while keeping innovation domestic and supporting law enforcement."
The CLARITY Act has produced an unusual alignment map:
For the bill: Coinbase, Ripple Labs, Kraken, Circle, Andreessen Horowitz, Blockchain Association, Crypto Council for Innovation, Stand With Crypto, Solana Labs, Uniswap, Block — organized through the 200+ company coalition letter and the separate 60+ CEO letter on BRCA.
Against the bill (or specific provisions): JPMorganChase, Bank of America, American Bankers Association, and multiple banking trade associations. Their opposition focuses narrowly on stablecoin yield provisions rather than the full bill.
Conditional support: Moderate Senate Democrats who voted for the bill in committee but require ethics provisions for floor support. Law enforcement organizations that may support the bill with modifications to Section 604.
A new political actor entered the landscape on June 3: the Defend Developers PAC, led by DeFi Education Fund policy lead Gavin Zavatone. It is the first unaffiliated PAC dedicated exclusively to developer protection, targeting congressional incumbents with pro-developer voting records.
Coinbase CLO Paul Grewal framed the legislative progress: "Step. By. Step. We. Are. Getting. Closer. This is what legislating looks like."
The CLARITY Act's passage or failure carries specific economic consequences:
If passed: Bitcoin and Ether would receive statutory classification as digital commodities under CFTC oversight, removing the residual securities risk that has constrained institutional participation. The CFTC would gain exclusive jurisdiction over digital commodity spot markets, creating a single federal regulator for the majority of crypto trading volume. Non-custodial developers would receive legal certainty, potentially reversing the offshore migration trend. Stablecoin issuers would operate under a clear yield framework that limits but does not eliminate competition with bank deposits.
If delayed or fails: The current enforcement-driven regulatory approach continues. The SEC and CFTC jurisdictional overlap persists, maintaining compliance uncertainty for exchanges and protocols. Developer migration offshore continues. Polymarket's 47% odds suggest the market has already partially priced in failure, though Galaxy's 60% estimate implies the bill remains more likely than not to pass — if floor time materializes.
The stablecoin yield fight has direct implications for the $307 billion stablecoin market. If activity-based rewards survive, stablecoin issuers gain a competitive product against bank savings accounts. If banking lobbies succeed in tightening the language, stablecoin utility remains primarily transactional.
California's Digital Financial Assets Law deadline of July 1, 2026, adds a parallel regulatory pressure: firms must either hold a DFPI license or have applied through NMLS by that date. Only stablecoins approved by the DFPI commissioner can be issued or exchanged in California after July. A federal framework under the CLARITY Act could preempt some state-level requirements, adding urgency for industry participants.
The CLARITY Act represents the first realistic prospect for comprehensive U.S. digital asset market structure legislation. The House passed it with a bipartisan supermajority. The Senate committee approved it with crossover votes. More than 200 companies have lobbied for it. The White House has engaged directly in resolving law enforcement objections.
None of that guarantees a floor vote. The bill's fate depends on whether Majority Leader Thune commits floor time, whether Democrats accept ethics language short of their initial demands, and whether law enforcement objections to Section 604 can be addressed without gutting the developer protections the crypto industry considers essential.
Senator Cynthia Lummis (R-WY) stated: "We are closer to a functioning digital asset market structure than we have ever been." That assessment is accurate in absolute terms. Whether "closer" translates to "close enough" before the August recess remains an open question. The calendar, not the policy, may prove the binding constraint.