Bitcoin rose back above $81,000 after the Senate Banking Committee voted to advance the Digital Asset Market CLARITY Act, clearing a major hurdle for the most comprehensive crypto regulation bill in U.S. history.
On May 14, the panel approved the legislation on bipartisan lines, sending the legislation to the full Senate floor. The successful increase caps ten months of difficult negotiations and represents a monumental shift toward establishing a clear federal framework for digital assets.
Patrick Witt, executive director of the White House Presidential Advisory Committee on Digital Assets, said:
“The CLARITY Act is not just good policy, it is necessary policy for the United States to maintain our leadership position in global financial markets. Not to mention the robust consumer protections and anti-illicit financial provisions it contains, without which there would be none.”
CLARITY The path to passage of the Act
The CLARITY Act aims to resolve a decade-long war between federal regulators by explicitly dividing jurisdiction over digital asset markets.
Under the recently approved text, the Commodity Futures Trading Commission (CFTC) will be given sweeping powers to regulate crypto spot markets, while the Securities and Exchange Commission (SEC) will oversee digital assets and primary offerings of investment contracts.
The path to the breakthrough barely survived a last-minute push from traditional bankers, including the American Bankers Association and the Bank Policy Institute.
Bankers had lobbied heavily against the reward provisions on stablecoins, warning that the bill could lead to a “deposit flight” from traditional financial institutions.
To secure the necessary bipartisan votes, lawmakers relied on a delicate compromise regarding stablecoin rewards.
The approved text explicitly prohibits platforms from offering passive returns on inactive stablecoin balances, which was a major win for the traditional banking sector. However, it allows “activity-based rewards” tied to direct platform transactions, such as gas costs or utility payments.
Still, the legislation drew sharp criticism from some progressive lawmakers, such as Senator Elizabeth Warren, who said:
“[CLARITY Act] will boost Donald Trump’s massive conflict of interest and his family’s crypto ventures.”
Conversely, crypto advocates celebrated the markup as a defining victory that would cement the industry’s growth. Coinbase CEO Brian Armstrong said the legislation will benefit the American people by making the U.S. financial system faster, cheaper and more accessible.
He added that the CLARITY Act “will also ensure that the U.S. is at the forefront of the global race to build the next generation of our financial system.”
What’s next for the bill?
Although the committee’s approval marks a historic milestone, the road to enactment remains a daunting legislative sprint.
Supporters of the CLARITY Act are aiming for a final signature by President Donald Trump by July 4, a deadline that leaves virtually no room for error.
The immediate obstacle is the calendar. Lawmakers face an impending Memorial Day recess on May 21, and the clock is ticking toward the August congressional recess.
To meet the July 4 target, the bill must first undergo reconciliation with Senate Agriculture Committee text before heading to the full Senate floor, where a supermajority of 60 votes is needed to pass.
From there, Senate leadership must reconcile the legislation with HR 3633, the corresponding digital assets bill passed by the House of Representatives in July 2025.
Despite the tough procedural challenge ahead, Galaxy Digital, a leading asset management firm, said it is “cautiously optimistic with a 55% probability that the bill will become law in 2026.”
However, Senator Cynthia Lummis previously warned that the bill, if stalled at any point, could derail the momentum. According to her, this could potentially delay comprehensive regulation of cryptocurrency until the end of this decade.