The CLARITY Act is moving into a tight, time-sensitive phase after the Senate Banking Committee released its draft on Friday. With the stablecoin compromise text now out in the open, attention is shifting to the long-awaited next step: a Senate Banking Committee markup.
CLARITY Act Heads Toward Committee Action
As Bitcoinist reported over the weekend, under the draft, the CLARITY Act would bar crypto firms from paying customers “any form of interest or yield” for simply holding payment stablecoins—language designed to reflect how banks pay interest on deposits.
At the same time, the bill would allow companies to offer rewards or incentives, as long as those incentives are not functionally or economically equivalent to interest earned on bank deposits.
On Monday, Eleanor Terrett of Crypto In America reported that many in crypto are framing the draft as a win for banks, arguing that a broad “no yield” approach hands banks an advantage. Banks, however, appear to be concerned that the compromise may not go far enough to stop crypto companies from finding workarounds.
The sticking point is the clause aimed at preventing rewards that are “economically or functionally equivalent” to interest on bank deposits—an effort to close loopholes, but one that may still leave room for interpretation.
A Senate Banking staffer captured that frustration in remarks shared on Friday: “Time for everyone to move on from yield. Banks should not turn a modest win into a loss.”
With the stablecoin yield provision cleared, the CLARITY Act appears to be approaching its final hurdles before Chairman Tim Scott schedules a Senate Banking Committee markup.
Per the report, industry leaders believe the markup could be announced later this week and held during the week of the 11th, when Congress returns from recess. If that timeline doesn’t work, another possible window is the week of the 18th, before the Senate leaves for the Memorial Day recess.
Final Language Not Done Yet
Behind the scenes, the focus is also shifting to “finishing touches” on other parts of the legislation. Industry insiders told Crypto In America that DeFi-related provisions—specifically the Blockchain Regulatory Certainty Act (BRCA)—and protections for software developers are likely to be finalized this week.
Ethics-related issues are also still in play. Sources familiar with the process told Crypto In America that negotiations on ethics provisions are ongoing, and that talks could continue even after the CLARITY Act clears the Senate Banking Committee.
While the legislative groundwork seems to be coming together, the question remains whether the markup and eventual vote will be bipartisan. Supporters are looking for Democratic buy-in, and one DeFi industry leader told Crypto In America that the next two weeks are critical.
The leader also said that bipartisan approval is key to getting the CLARITY Act done, adding that without Democrats, the measure can’t move forward. At the same time, it’s unclear whether the process will stay along party lines, as it did in the Senate Agriculture Committee in January.
Featured image created with OpenArt, chart from TradingView.com
