CryptoSlate
The Senate Banking Committee released updated text of the CLARITY Act on May 12, two days before a scheduled May 14 committee markup, advancing the most ambitious US digital asset market-structure bill of the cycle into formal public debate. The draft bundles market-structure rules, a narrow ban on passive yield from payment stablecoins, preserved protections for non-custodial DeFi developers, and an explicit statutory lane for banks and credit unions to custody, settle, and lend against digital assets. Senator Thom Tillis called the package a "bipartisan compromise that will provide regulatory certainty needed to foster innovation in the United States."
Why it matters
Section 404 is the provision the industry is reading closest: it bars covered digital asset service providers and their affiliates from paying US customers passive interest or yield on payment stablecoin balances, addressing a long-running banking-industry complaint that yield-bearing stablecoin products amount to uninsured deposit competition. The text still leaves a narrower door open, preserving activity-based rewards tied to transactions, payments, staking, governance, and loyalty under future SEC, CFTC, and Treasury rulemaking. That split — passive yield out, activity-based incentives in — is the compromise banks and exchanges will both test during markup.
DeFi developers keep their core shield. The bill's Blockchain Regulatory Certainty Act language clarifies that non-custodial developers, validators, and infrastructure providers are not money transmitters merely for building software, while preserving criminal liability for those who knowingly move illicit proceeds. A separate provision insulates routine governance actions, network participation, and limited cybersecurity emergency measures from being treated as centralized control — a line the DeFi lobby had been watching closely.
Banks get the cleanest win. Section 401 clarifies that national banks, state banks, financial holding companies, and certain credit unions may use digital assets and blockchain rails for payments, custody, lending, and trading, anchored to activities they are already permitted to conduct. Crypto firms gain a counterweight: more institutional liquidity and custody capacity, but sharper competition from regulated incumbents once legal uncertainty fades.
Market impact
The unresolved political risk is the ethics carve-out the latest text omits.
Frequently asked questions
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What does the CLARITY Act do to stablecoin rewards?
Section 404 bars covered digital asset service providers and their affiliates from paying US customers passive interest or yield on payment stablecoin balances, while preserving activity-based rewards tied to transactions, staking, governance, and loyalty under future SEC, CFTC, and Treasury rulemaking.
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Does the bill protect DeFi developers?
Yes. The Blockchain Regulatory Certainty Act language clarifies that non-custodial developers, validators, and infrastructure providers are not money transmitters merely for building software, while preserving criminal liability for those who knowingly move illicit proceeds.
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How does the CLARITY Act change rules for banks?
Section 401 gives national banks, state banks, financial holding companies, and certain credit unions a statutory basis to use digital assets and blockchain technology for payments, custody, lending, and trading, anchored to activities they are already permitted to conduct.
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What is the biggest unresolved political issue?
Democrats led by Senator Elizabeth Warren have conditioned support on restrictions barring federal officials from profiting off digital asset ventures while shaping policy — a provision the latest committee text does not include.
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What happens next in the legislative process?
If approved by the Senate Banking Committee on May 14, the bill still requires further negotiation, full Senate floor scheduling, and reconciliation with the House before it could reach President Trump's desk — a path lawmakers say could close before July 4.
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