US Senate Banking Panel to Mark Up Clarity Act on May 14 Despite Bank Pushback

Doohyun Hwang

Summary

The US Senate Banking Committee will hold a markup hearing on the Clarity Act on May 14, accelerating efforts to advance the legislation.
Senators Thom Tillis and Angela Alsobrooks proposed a compromise that would restrict interest payments on stablecoins, providing a breakthrough after months of delay.
Despite strong concerns from the banking industry, the Senate Banking Committee is moving ahead with the bill, though issues including a conflict-of-interest provision and reconciliation with the Senate Agriculture Committee's version remain unresolved.

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The US Senate Banking Committee is set to begin formal consideration of the Clarity Act, pressing ahead with the legislation despite continued opposition from traditional banks.

CoinDesk reported on May 8 that the committee will hold a markup hearing on the Clarity bill on May 14.

The measure had been stalled since January, when Coinbase Chief Executive Officer Brian Armstrong withdrew his support, citing provisions including a ban on interest payments on stablecoins. A breakthrough emerged last week after Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks put forward a compromise. It would ban interest on merely deposited stablecoins while allowing rewards for stablecoins used in certain activities.

The Senate Banking Committee has not released the full text of the revised bill. Banks are still raising strong objections. In a joint letter issued on May 8, major industry groups including the American Bankers Association, the Bank Policy Institute and the Independent Community Bankers of America urged the committee to make further wording changes, saying additional revisions are needed to protect consumers while supporting digital-asset innovation. The groups also submitted detailed recommendations.

Even so, the committee's decision to schedule a markup indicates lawmakers intend to move forward with the bill based on the current compromise, regardless of the banking industry's opposition.

Other issues remain before the legislation can pass. Senator Kirsten Gillibrand has argued that the bill should include a conflict-of-interest provision barring senior government officials from profiting financially while regulating the crypto industry.

Whether that ethics provision will be included in the version taken up by the Senate Banking Committee remains unclear. Even if the Clarity Act clears the panel, it must still be reconciled with the version prepared by the Senate Agriculture Committee before reaching a full Senate vote.