The Senate Banking Committee approved the Clarity Act on May 14 with a 15-9 vote, marking a major step toward clearer regulation of the cryptocurrency industry [1, 2]. Democratic Senator Ruben Gallego joined all Republicans on the committee in supporting the bill, signaling rare bipartisan agreement [1, 2].
The legislation classifies most crypto tokens as "digital commodities" under the Commodity Futures Trading Commission and designates a smaller group as securities regulated by the Securities and Exchange Commission [2]. It also requires cryptocurrency exchanges to adopt anti-money laundering safeguards similar to those imposed on traditional banks [2].
A compromise in the bill allows stablecoin issuers to pay rewards linked to specific activities like payments while prohibiting interest-like payments for simply holding stablecoins [1, 2]. This provision sparked debate. The banking industry warns that such rewards could reduce bank deposits and loan capital, but crypto advocates counter that the bill only permits rewards tied to spending stablecoins, not passive interest payments [1].
Brian Armstrong, CEO of Coinbase, said he supports the latest version of the bill after initially withdrawing support in January over stablecoin language [2]. Major crypto companies including Coinbase, Circle, Ripple, and venture capital firm Andreessen Horowitz back the legislation [1]. Armstrong declared it "strong... will benefit the American people by making the US finan" [2].
Senate Banking Committee Chair Tim Scott said, "For years, the digital frontier was trapped in a regulatory gray zone... the government should have been crafting clear rules of the road." Meanwhile, Senator Mark Warner remarked, "I guess I'm right now in crypto purgatory, but I'm looking forward to getting all the way there" [1].
The bill had been stalled in the Senate since the House passed an earlier version in July 2025 [2]. Following the committee's approval, Coinbase, Strategy, Robinhood, and Galaxy Digital stocks rose from 6% to 9% [2].
The bill still must pass the full Senate and House and be signed by President Donald Trump before becoming law [1].
