The U.S. Senate releases the full version of the "CLARITY Act," clarifying federal boundaries for digital asset regulation

On May 12th, the U.S. Senate Banking Committee released the full text of the 309-page latest version of the "Digital Asset Market Clarity Act" (CLARITY Act), and a hearing and vote are scheduled for this Thursday. The bill aims to clarify the regulatory boundaries for digital assets by federal agencies and is a long-awaited regulatory framework for the crypto industry.

The bill clearly defines the regulatory authority of agencies. Digital commodities on decentralized blockchains are under CFTC jurisdiction, assets with investment contract attributes are regulated by the SEC, and stablecoins are jointly regulated by both agencies.

However, the new version still contains controversial provisions regarding stablecoin yields. The latest text retains the reward mechanism linked to trading and fully bans issuers from offering bank-like interest yields.

Banking groups oppose the stablecoin yield provisions, arguing that they harm traditional deposit services; the crypto industry strongly counters, claiming that banning them would stifle industry competition. Previously, senators who helped broker a compromise insist on the current plan, believing it is a feasible bipartisan approach.

Additionally, the debate over moral clauses remains intense. Democrats demand the inclusion of restrictions on officials profiting from the crypto industry, while the White House firmly opposes restrictive provisions targeting the president. Fortunately, the bill has not yet incorporated moral clauses.

Democratic senators state that if moral clauses are not included in the conflict of interest provisions, Democratic members will not support the bill. This disagreement also significantly impacts the prospects for bipartisan cooperation on the bill.

The bill also provides legal immunity protections for DeFi blockchain developers. Previously, Coinbase withdrew support for the bill over concerns about developer rights, and this clause was introduced to address that controversy and garner support from the crypto industry.

The bill's review timeline is tight; the Senate Banking Committee must complete the review of the CLARITY Act before Memorial Day on May 21, or the legislative window will be significantly delayed. The White House also hopes to have the bill signed into law by the president before July 4th.

Overall, the voting outcome in the Senate Banking Committee this Thursday may be a key turning point for whether the bill can proceed smoothly.