Clarity Act advances in Senate Banking Committee with stablecoin rewards compromise

The Clarity Act is set for a Senate Banking Committee markup, after the bill secured enough support to become the strongest U.S. crypto market-structure push in months. The committee released updated substitute text for H.R. 3633 (Digital Asset Market Clarity Act), supported by Chairman Tim Scott and Senators Cynthia Lummis and Thom Tillis. Key negotiations in the Clarity Act focus on stablecoin rewards, SEC vs CFTC jurisdiction, AML requirements, DeFi treatment, and protections for software developers. A prior January delay tied to industry pushback—especially Coinbase CEO Brian Armstrong’s opposition—has eased, with Armstrong now saying the revised approach is “the best place we’ve seen so far,” and Coinbase again willing to support the markup. Stablecoin incentives are the main compromise: the draft aims to separate “idle-balance” rewards from payment-linked, yield-like incentives. Banks argue stablecoin rewards could divert deposits away from traditional insured banking. Crypto firms counter that a broad ban would weaken payment competition and give banks excessive control over digital-dollar products. Beyond stablecoins, the Clarity Act seeks clearer regulation boundaries for U.S. crypto platforms, including digital commodity trading, custody, token issuance, and intermediary obligations via a more defined SEC vs CFTC split. Committee approval is not final law, but it moves the bill to amendments and Senate floor vote math. For traders, today’s Clarity Act markup is an important regulatory catalyst. It may improve short-term expectations for regulatory clarity, but the path to enactment remains uncertain—so price impact could be headline-driven and volatile.