The U.S. Senate Banking Committee convenes at 10:30 AM ET on May 14, 2026, to mark up H.R. 3633, the Digital Asset Market Clarity Act — a 309-page bill that would, for the first time, formally divide crypto oversight between the SEC and CFTC. The committee splits 13-11 Republican-Democrat, and al...
"Families, small businesses, investors, and innovators deserve clear rules of the road for digital assets. The Senate's version of the CLARITY Act delivers certainty, safeguards, and accountability, while protecting Main Street." — Senator Tim Scott (R-SC), Chairman, Senate Banking Committee
The U.S. Senate Banking Committee convenes at 10:30 AM ET on May 14, 2026, to mark up H.R. 3633, the Digital Asset Market Clarity Act — a 309-page bill that would, for the first time, formally divide crypto oversight between the SEC and CFTC. The committee splits 13-11 Republican-Democrat, and all 13 Republican votes are required for passage. Senator John Kennedy (R-LA), the last uncommitted Republican, confirmed his support ahead of the session, according to Semafor, making committee clearance likely.
The markup arrives after four months of negotiation over stablecoin yield rules that threatened to kill the bill entirely. A bipartisan compromise brokered by Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) on May 1 bans passive interest on stablecoin holdings but permits activity-based rewards tied to transactions. That deal satisfied Coinbase — which had withdrawn support earlier in 2026 — but drew formal opposition from the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America. The ABA alone sent more than 8,000 letters to Senate offices opposing the provision.
Over 130 amendments have been filed, 44 from Senator Elizabeth Warren (D-MA) alone, covering everything from government ethics to CBDC prohibitions. Virtually none are expected to be adopted. Polymarket prices the bill's odds of becoming law in 2026 at 73%, up from 46% at the start of May. The White House has targeted July 4 for a signing ceremony.
The Digital Asset Market Clarity Act creates a classification framework splitting digital assets into three categories:
The bill introduces "Regulation Crypto," an exemption from full SEC registration for ancillary assets distributed in connection with an investment contract. This provision allows crypto projects to raise capital from retail investors without the compliance burden imposed on publicly traded companies, provided they file periodic disclosures with the SEC.
The SEC and CFTC are required to jointly define key terms, establish rules for mixed platforms, and create a delisting framework for assets that migrate between categories. According to the Senate Banking Committee's section-by-section analysis, the joint rulemaking process would have an 18-month implementation window, placing main rules effective in late 2027.
The bill also mandates Bank Secrecy Act compliance for digital asset exchanges, brokers, and dealers — including anti-money laundering programs, suspicious activity reporting, and sanctions enforcement.
An estimated 50 million U.S. crypto holders would be directly affected by the regulatory clarity the bill provides, according to a Benzinga analysis.
The single most contested provision in the 309-page bill concerns stablecoin rewards. U.S. banks fund approximately 80% of their lending through customer deposits. Stablecoin issuers paying yield on idle holdings — as Coinbase does with USDC rewards — create a competing savings vehicle that could drain bank deposits.
The Tillis-Alsobrooks compromise reached on May 1 draws a line:
Coinbase initially withdrew support for the CLARITY Act in early 2026, citing three objections: insufficient protections for open-source developers, a blanket stablecoin yield ban, and unresolved DeFi regulation. CEO Brian Armstrong reversed course after personally reviewing updated drafts with SEC Chairman Paul Atkins and Treasury Secretary Scott Bessent, calling the result a "strong" bill. Coinbase Chief Legal Officer Paul Grewal said the language "preserves activity-based rewards tied to real participation on crypto platforms and networks."
Banks see it differently. On May 9, the ABA, BPI, and ICBA formally rejected the compromise. Their argument: even "activity-based" rewards give users a reason to park dollars in stablecoin wallets instead of bank checking accounts. The ABA's 8,000-letter campaign to Senate offices represents one of the largest coordinated lobbying pushes against a crypto bill to date.
Senate Banking Committee members filed over 130 proposed amendments ahead of Thursday's markup, according to a copy reviewed by Fortune. The amendment count signals political friction, not substantive risk to the bill's passage. Republican control of committee mechanics means most Democratic amendments face procedural death.
Key amendment clusters:
Senator Elizabeth Warren (D-MA) — 44 amendments:
Senator Jack Reed (D-RI) — 18 amendments:
Senator Bill Hagerty (R-TN):
Senator Mark Warner (D-VA):
Senator Kirsten Gillibrand (D-NY) has stated the bill "will not get approved" without ethics conflict-of-interest provisions. However, her opposition is unlikely to change the committee vote math if all 13 Republicans hold.
Section 604 of the CLARITY Act incorporates the Blockchain Regulatory Certainty Act (BRCA), which explicitly shields open-source developers and node operators from money transmitter classification. The core principle: building open-source blockchain software, operating a node, or validating transactions does not make someone a money transmitter under federal law, provided they do not take custody of customer funds.
This provision was a critical factor in bringing Coinbase back to the table after its withdrawal.
The DeFi Education Fund identified 16 "anti-DeFi amendments" filed ahead of markup, warning they could "harm DeFi technology, users, and developers if implemented." Among them: amendments by Senators Catherine Cortez Masto (D-NV) and Jack Reed targeting BRCA protections.
A compromise added language to the BRCA section clarifying the level of intent required to be considered an illegal money transmitter. This language received support from DeFi advocates, but remains a target for amendment.
The committee divides 13 Republicans to 11 Democrats. Chairman Tim Scott needs all 13 Republican votes, a margin he has called "the red zone." The calculus:
| Factor | Status | |--------|--------| | Republican votes secured | 13 of 13 (Kennedy confirmed) | | Democratic support required | 0 for committee passage | | Democratic support required for Senate floor | Need 7+ for 60-vote threshold | | Key Democratic holdouts | Warren, Gillibrand (ethics demands) | | Banking lobby opposition | ABA, BPI, ICBA actively opposing | | Crypto industry support | Coinbase, 100+ firms backing |
Kennedy's confirmation eliminates the last Republican uncertainty at committee level. The harder fight comes on the Senate floor, where 60 votes are needed. That requires at least seven Democrats to cross party lines — a threshold that explains why the ethics amendment battle matters more for full Senate passage than for Thursday's committee vote.
Polymarket prices the probability of the CLARITY Act becoming law in 2026 at 73%, up from 46% at the start of May. The odds have been volatile: they spiked to nearly 80% after the Tillis-Alsobrooks compromise, dropped to 62% when banks rejected the deal on May 9, and recovered after Kennedy's commitment.
Bitcoin traded at $79,319 on May 14 (down 1.47%), and Ethereum at $2,258 (down 0.73%). The Crypto Fear & Greed Index stood at 34. Markets appear to have partially priced in committee passage given Kennedy's announcement, with the remaining uncertainty centered on Senate floor dynamics and the amendment gauntlet.
More than 100 crypto firms signed a joint letter to Senate leadership in April urging action on the markup, according to CoinDesk.
If the bill clears committee Thursday, it merges with companion legislation — the Digital Commodity Intermediaries Act — that already passed the Senate Agriculture Committee in February 2026. The combined bill requires 60 votes to pass the full Senate.
The White House has set a target of July 4 for signing. That timeline requires:
The SEC and CFTC would then have 18 months for joint rulemaking, placing operational rules in late 2027 at the earliest. Summer recess and midterm election pressures compress the legislative calendar significantly.
The CLARITY Act markup represents the most advanced stage any comprehensive U.S. crypto market structure legislation has reached. The bill resolves the SEC-CFTC jurisdictional question that has defined crypto's regulatory limbo since at least 2017. Committee passage appears secured. The stablecoin yield compromise, while imperfect, survived the most significant legislative threat — Coinbase's withdrawal — and now faces a banking lobby opposition campaign that is unlikely to alter committee-level vote math.
The harder question is whether seven or more Senate Democrats will ultimately vote for a bill that lacks the ethics provisions Warren and Gillibrand demand, amid an election year with crypto industry ties to the White House under scrutiny. The July 4 target is ambitious. The 60-vote threshold is the real gate.