Senate Banking Committee Releases CLARITY Act Draft, Keeps Stablecoin Interest Dispute

The U.S. Senate Banking Committee has released a new draft of the CLARITY Act, legislation that would establish a market structure for digital assets.

Eleanor Terrett, host of CryptoAmerica, reported on May 12 that the committee published the 309-page draft it has been preparing since January. Ahead of a markup session scheduled for May 14, the panel is accepting amendments from lawmakers through the close of the next business day.

The draft largely mirrors a version previously shared with the industry, but keeps in place a contentious provision on stablecoin yield, or interest, structures. It also includes legal protections for decentralized finance, or DeFi, developers, reflecting a key industry request.

The bill would also strengthen consumer protections and efforts to combat illicit finance. Senate Banking Committee Chairman Tim Scott said the measure is intended to protect consumers, address financial crime and establish a responsible market order. He added that it is also designed to keep the U.S. at the center of financial innovation.

Uncertainty remains over whether the bill can win final passage. The latest draft does not include a provision restricting crypto-related conflicts of interest for public officials, though that issue could still be addressed separately. Democrats have said they would have difficulty backing the bill without such language, while the White House opposes rules aimed at a specific individual.

Tensions between banks and the crypto industry over stablecoins are also continuing. Some in the financial sector are calling for limits on stablecoin rewards programs, while the industry has mounted a last-minute lobbying push over the provision.

The draft also includes language similar to the Blockchain Regulatory Certainty Act, or BRCA. It would prevent developers who do not directly control user funds from being treated as money transmitters. The report also said measures to expand law enforcement authority in anti-money laundering investigations are under discussion.

If the bill clears the committee, it would still need to be reconciled with the Senate Agriculture Committee's version before moving to a floor vote. Final passage would require at least 60 votes, making support from some Democrats essential.

The White House is targeting action on the bill by July, though some lawmakers have suggested discussions could continue into early August.