CLARITY Act final draft drops ahead of May 14 markup — here's what's actually in it!

The Senate Banking Committee released updated CLARITY Act text on May 12, moving the bill from private negotiation into a public committee process ahead of a scheduled May 14 markup. The legislation would define how network tokens are classified, expand federal market regulators' authority, give banks and credit unions a statutory basis for digital asset custody and payments, and create a framework that explicitly protects non-custodial DeFi developers from money-transmitter liability.

The most contested provision is Section 404, which bans covered platforms from paying US customers passive yield on payment stablecoin balances — a direct concession to banking groups worried about deposit flight — while leaving room for activity-based rewards tied to transactions, staking, governance, or loyalty programs. That line will be stress-tested during markup.

DeFi developers secured the…