The CLARITY Act passes the Banking Committee vote: a 309-page draft rips through the U.S. political and business establishment

Original Title: “309-Page Crypto Draft Tears Apart US Business and Political Circles”
Original Author: Mahe, Foresight News

On May 14, the U.S. Senate Banking Committee approved the “CLARITY Act” with 15 votes in favor and 9 against, officially submitting the bill for a full Senate vote.

This moment, the crypto industry has waited nearly a year. The House had already passed the bill with a large bipartisan majority of 294-134 on July 17, 2025, but disputes over the stablecoin yield provisions, DeFi exemptions, and ethical requirements in the Senate version caused delays.

It wasn’t until May 12 that the Senate Banking Committee released the latest 309-page draft text.

This bill, dubbed a “game changer” within the industry, aims to end the SEC and CFTC’s long-standing regulatory tug-of-war, defining the jurisdictional boundaries of digital assets in federal law for the first time. It not only provides clear rules for exchanges, brokers, and DeFi developers but also embeds consumer protection, anti-money laundering, and anti-CBDC provisions.

However, little known is that the CLARITY Act once caused a rare rift in the US political-business alliance, facing joint opposition from the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations). What exactly does the CLARITY Act draft say?

Core Content of the 309-Page Draft

The full name of the Clarity Act is the Lummis-Gillibrand Responsible Financial Innovation Act of 2026, introduced by French Hill (R-AR), Chair of the House Financial Services Committee, on May 29, 2025.

In June of the same year, the bill passed a joint markup by the Financial Services and Agriculture Committees, and on July 17, it was approved by the full House. The bill was officially named “CLARITY Act of 2025,” including a section called “Anti-CBDC Surveillance State Act.”

The bill, totaling 309 pages, mainly consists of 9 parts:

1. Securities Innovation, outlining disclosure requirements and exemptions related to asset-backed transactions, clarifying the features of “network tokens,” and under certain conditions, treating them as non-security assets.

2. Combating Illegal Finance, bringing digital assets under the regulation of the Bank Secrecy Act (BSA) and sanctions laws.

3. DeFi Industry Regulation, applying existing securities intermediary and BSA requirements to non-decentralized financial protocols.

4. Banks and Regulation, clarifying the permissibility of banks engaging in digital asset activities. Prohibiting interest or yield payments on payment stablecoins,

5. Establishing a CFTC-SEC Micro-Innovation Sandbox, international cooperation, automated compliance research, securities tokenization, voluntary post-quantum cryptography standards, etc.

6. Protecting Software Developers and Customer Assets, safeguarding developers, NFT safe havens, research on non-fungible tokens, blockchain regulatory certainty acts, Keep Your Coins Act (self-custody protection).

7. Customer Asset Protection

8. Customer Protection

9. Other Matters, etc.

The core of the draft revolves around the SEC and CFTC regulatory boundaries, the non-security treatment of tokens (staking, governance systems), etc.

The draft first clarifies the boundaries between “digital commodities” and “securities,” thereby delineating SEC and CFTC jurisdiction. According to the latest excerpted text, the CFTC will have exclusive jurisdiction over “digital commodities”—namely, mature network-native tokens whose value mainly derives from decentralized blockchain functions; while the SEC retains jurisdiction over “investment contracts” and assets in their initial issuance phase. The draft introduces “mature blockchain testing,” requiring blockchain systems to meet conditions like no single entity control, distributed ownership, open source, exemplified by BTC and ETH.

Once certified, related tokens will automatically become non-securities, allowing issuers to be exempt from some SEC registration requirements, but they must continue to disclose initial and semi-annual reports.

In simple terms: it shifts from “possibly securities in early stages” to “becoming regular commodities when mature,” greatly simplifying regulation and expanding innovation space.

For intermediaries, digital commodity brokers, dealers, and trading platforms must register with the CFTC and fulfill customer asset segregation, risk disclosure, and AML (BSA) obligations. The bill specifically includes provisions from the “Blockchain Regulatory Certainty Act,” providing clear exemptions for non-custodial DeFi protocols, node operators, and open-source developers—they do not need to register as money transmitters or brokers as long as the protocol is truly decentralized (decentralized governance itself does not constitute “control”).

Stablecoin provisions are the latest point of compromise. The bill defines them as “permitted payment stablecoins” (e.g., compliant payment stablecoins like USDC), excluding them from the digital commodity category. The new text prohibits digital asset service providers covered by the bill from paying passive interest or yield to U.S. customers, but allows rewards based on real activities or transactions.

On May 12, the new text incorporated restrictions related to stablecoin rewards and the “Blockchain Regulatory Certainty Act,” clarifying that non-custodial developers are not considered money transmitters. Previously, Coinbase withdrew support over stablecoin reward clauses but shifted to support after the latest compromise text was released in early May, indicating industry acceptance of a middle ground.

The End of Regulatory Gaps, Institutional Funds Will Return to the US

Over the past decade, US crypto regulation has been in a “gray area.” The SEC, known for “enforcement-style regulation,” litigated platforms like Coinbase and Ripple, creating long-term uncertainty, leading to capital outflows and projects relocating to Singapore, Dubai, and elsewhere. The passage of the Clarity Act will provide the first federal-level certainty framework.

For the market, this means institutional investors and traditional finance can enter with more confidence. The CFTC’s clear jurisdiction over spot digital commodities will promote more ETF products, banking custody services, and payment innovations. According to supporters, clear rules could attract institutional capital back to the US.

Michael Saylor stated that last night’s deliberation of the “CLARITY Act” will unleash the next wave of digital capital, digital credit, and digital rights in the US and globally, providing institutional validation for BTC.

a16z partner Chris Dixon and other crypto leaders have long called for “clarity in rules,” believing the bill will keep the US at the forefront of innovation.

For crypto users and developers, DeFi developers will gain a “safe harbor,” and ordinary users will benefit from mandatory disclosures, asset segregation, and anti-fraud provisions. The CFTC will gain new tools to combat market manipulation and illegal finance. Meanwhile, the bill retains regulatory authority over unfair deceptive practices and requires the publication of digital asset fraud educational materials.

From a national competitiveness perspective, Senate Banking Committee Chair Tim Scott explicitly stated: “This bill puts consumers first, fights illegal finance, curbs crime and foreign adversaries, and keeps the financial future in America.”

On May 8, SEC Chair Paul Atkins, speaking at the “AI + Expo Special Competitive Research Program,” supported limited innovation exemptions and called for Congress to pass the CLARITY Act to provide long-term certainty legislatively. Atkins warned that overregulation or uncertainty could push innovation overseas, and the US should continue to lead global markets through understanding and adaptation.

However, there are opposing voices. According to Bloomberg, the AFL-CIO (American Federation of Labor and Congress of Industrial Organizations) issued a letter to senators on Tuesday opposing the CLARITY Act, expressing concern that the bill could lead to large amounts of digital assets flowing into pension plans, retirement accounts, and the broader financial system, risking harm to workers.

Controversies and Internal Industry Battles: Bank Lobbying, Democratic Resistance, and Industry Divisions

Despite strong bipartisan support, the Clarity Act still faces multiple obstacles. The biggest controversy centers on the stablecoin yield provisions.

To clarify the core concept: “permitted payment stablecoins” are compliant stablecoins pegged 1:1 to USD or other fiat currencies, mainly used for daily payments and transfers (similar to regulated USDC).

The bill explicitly bans such stablecoins from paying any interest or “deposit-like” passive yields to users, aiming to prevent crypto platforms from encroaching on traditional banking deposit business. Any asset classified as a “Payment Stablecoin” must not generate interest; otherwise, it faces significant compliance pressure.

Traditional banking has long been a Republican stronghold, but this bill is seen as directly challenging their core interests. The American Bankers Association (ABA) and other banking lobbies strongly oppose any form of “deposit-like” yields, arguing it erodes bank deposits and causes large-scale capital flight.

They sent an urgent letter to all US bank CEOs earlier this week, urging them to close loopholes allowing crypto platforms to bypass the GENIUS Act ban.

Crypto industry advocates argue that excessive restrictions on rewards will severely stifle innovation and user incentives.

Coinbase CEO Brian Armstrong previously withdrew support in January 2026 over similar clauses, delaying deliberation; but after the latest compromise text was released in early May, he publicly announced support for “marking it up” (advancing the review), indicating industry acceptance of a compromise.

Elizabeth Warren

She criticized the bill as “weakening securities laws” and “giving a green light to Trump-era corruption,” and proposed 38 amendments to strengthen AML requirements, official asset disclosures, and prevent public officials and their families from profiting from crypto. Warren pointed out that the Trump family had profited at least billions of dollars through crypto transactions during his tenure, and without sufficient safeguards, the bill could threaten investors and national security.

The harsher political reality is the Senate voting threshold: Republicans hold about 53 seats, Democrats 45, and Independents 2 (usually aligned with Democrats). To end debate and proceed to a final vote, 60 votes are needed—a supermajority. This means the bill must secure support from at least 5 Democratic senators.

Bank lobbying groups are exploiting this key point by rallying some Democratic senators to create resistance—the repeated tug-of-war over the stablecoin yield provisions has been the biggest variable in advancing the bill.

Internal industry divisions also exist. Some see DeFi exemptions as potential money laundering risks, and the lobbying war between banks and crypto is heating up. Senator Thom Tillis admitted: after months of tough negotiations with stakeholders, this is a bipartisan compromise.

Once the Clarity Act passes, it will be formally reported to the full Senate by the committee, entering debate and voting (requiring 60 votes to end debate). After passing, it must be coordinated with the House’s 2025 version, and both chambers must approve the same text before sending it to the President for signature. Once signed into law, the SEC and CFTC will have 360 days to jointly develop detailed regulations, at which point the core regulatory framework will be established.

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