【Cryptocurrency】U.S. Senate Banking Committee reviews the "Clarity Act" on 5/14

U.S. Senate Banking Committee to review the long-awaited “Clarity Act” on May 14.

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The cryptocurrency industry continues to strongly push for this legislation, believing it is crucial to the future survival of U.S. digital assets. The bill will clearly define under what circumstances crypto tokens are considered securities, commodities, or other assets, providing essential legal clarity for the industry.

However, there are serious disagreements between the crypto sector and the banking industry regarding the issue of “interest payments on stablecoins.” Last week, Senators Thom Tillis and Angela Alsobrooks proposed a compromise plan on yields: banning crypto companies from offering interest on static stablecoin reserves but allowing rewards on stablecoins involved in trading activities. This plan appears to address one of the key hurdles hindering the bill’s progress.

Despite this, banking groups remain skeptical of the compromise text and have indicated they will submit feedback. In a joint letter released Friday by the American Bankers Association (ABA), Bank Policy Institute (BPI), Independent Community Bankers of America (ICBA), National Bankers Association (NBA), and Consumer Bankers Association (CBA), they stated: “We need further revisions to reach a bill that both embraces digital asset innovation and enhances consumer protections.”

Bank lobbyists continue to seek amendments to the “Clarity Act” to close a legal “loophole” from last year that allowed intermediaries to pay interest on stablecoins. The banking sector warns this could lead to significant outflows of deposits from insured traditional banks, threatening financial stability. Conversely, crypto companies argue that banning third-party entities like exchanges from paying interest on stablecoins would be anti-competitive.

The House of Representatives passed its version of the “Clarity Act” last July, but the Senate must pass the bill by the end of 2026 for it to be officially sent to President Donald Trump for signing into law.

Additionally, many Democratic members of Congress still oppose the bill, citing weak anti-money laundering provisions; they also call for stricter measures to prevent political officials from profiting from crypto companies while regulating the industry.