The Senate Banking Committee plans to mark up the CLARITY Act on May 14, giving the stalled crypto-market-structure bill its clearest path this year toward a committee vote.
The hearing would move one of Congress’s most closely watched digital-asset bills from private negotiations into a public amendment process, where lawmakers are expected to test whether a fragile compromise on stablecoin incentives can survive pressure from banks, crypto firms, and Democrats seeking stricter ethics language.
The committee step is significant because Banking controls a central piece of the Senate’s market-structure package. Any text approved by the panel would still need to be reconciled with the Senate Agriculture Committee’s work before the legislation could move toward the Senate floor.
The bill has been one of the crypto industry’s top priorities in Washington because it would establish a broader federal framework for digital-asset markets, including how tokens are classified, which agencies oversee trading activity, and how intermediaries operate under federal law.
The latest calendar move suggests Senate negotiators have made enough progress to bring the bill into the open, even as major points of friction remain unresolved.
Banks mount eleventh-hour lobby against CLARITY Act
The immediate test centers on the compromise language negotiated by Sens. Thom Tillis and Angela Alsobrooks to resolve a dispute over stablecoin-linked incentives.
The proposal would restrict yield-like payments on passive stablecoin reserve holdings while preserving room for rewards tied to active use.
Crypto firms have argued that a distinction is necessary to protect ordinary customer rewards and transaction-based incentives. Banking groups say the language could still allow digital-asset companies to offer products that function too much like interest-bearing accounts.
The compromise helped revive negotiations after months of uncertainty over the bill’s direction. Coinbase Chief Executive Officer Brian Armstrong said in January that the exchange was withdrawing support due to concerns about stablecoin yield restrictions and other provisions.
Since then, the yield fight has become a proxy for a broader dispute over how much room crypto firms should have to compete with banks for customer balances.
Banking groups have urged lawmakers to tighten the language before the markup, warning that stablecoin rewards could draw deposits away from federally insured institutions and reduce the funding base used for mortgages, small-business loans, and agricultural credit.
In a May 8 letter, a coalition led by the American Bankers Association argued that Congress should close what it describes as an interest loophole.
The groups have pressed senators to prevent crypto firms from using transaction rewards, loyalty programs, or other incentives to replicate yield products through different wording.
Lorrie Trogden, president and chief executive officer of the Arkansas Bankers Association, said stablecoins lack the protections and community-lending function of bank deposits.
Considering this, the banking groups are urging the public to ask senators to tighten the CLARITY Act before it advances.
Crypto firms push back against banks
Crypto executives have countered that the banks are trying to block competition, even though lawmakers have already moved to restrict stablecoin yield.
Paul Grewal, chief legal officer at Coinbase, has criticized the banking lobby’s position, arguing that banks first objected to products resembling interest-bearing accounts and are now targeting ordinary customer incentives.
However, other industry figures have urged lawmakers to move the bill forward rather than reopen the compromise.
Kristin Smith, president of the Solana Institute, described the markup as a foundational moment for US digital-asset policy, saying the country has the developers, capital markets, and institutions needed to lead if Congress creates workable rules.
Stuart Alderoty, chief legal officer at Ripple, has also described the hearing as a hard-earned milestone, while warning that Washington has a limited window to establish a viable framework before more digital-asset activity shifts overseas.
The industry’s argument is that the compromise already separates passive yield from active rewards and gives lawmakers a way to address bank concerns without turning the bill into a ban on customer incentives.
The banks’ argument is that any reward tied to stablecoin balances could become economically indistinguishable from interest, especially if large exchanges or payment platforms use incentives to attract customer funds at scale.
Ethics fight adds another hurdle
As the clock ticks down to May 14, the situation remains fluid. The committee had not released the finalized, fully updated text of the CLARITY Act to the public as of press time, leaving market analysts speculating on the exact wording of the stablecoin provisions.
Furthermore, some Democratic lawmakers are seeking ethics provisions that would restrict senior government officials and regulators from personally profiting from the digital-asset industry while overseeing it.
Supporters of that language argue that market-structure legislation should address conflicts of interest as crypto becomes more closely tied to politics and public policy.
However, Republicans and industry supporters have focused more heavily on advancing the core market-structure framework, arguing that prolonged delays would leave companies operating under enforcement-driven rules and fragmented agency oversight.
The May 14 markup will show whether Senate negotiators can convert months of private bargaining into a bill capable of surviving committee scrutiny.
A successful vote would not end the fight, but it would mark the strongest sign yet that Congress may be prepared to move the CLARITY Act beyond negotiation and into the formal legislative process.
