U.S. Senate Releases Full Text of Clarity Act Crypto Market Structure Bill Ahead of Key Vote

TLDR

• The Senate Banking Committee released the full text of the Clarity Act, a crypto market structure bill, ahead of a May 14 committee vote.
• The bill includes restrictions on stablecoin yield payments and legal protections for DeFi developers.
• Banks are pushing to close what they call a stablecoin “loophole,” warning it could pull deposits away from traditional banks.
• A conflict-of-interest provision targeting crypto profits by government officials is not yet in the bill — Democrats say it must be included.
• Polymarket puts the odds of Trump signing the Clarity Act into law this year at 64%.

(SeaPRwire) –   The Senate Banking Committee unveiled the complete text of the Clarity Act late Monday, just hours before a scheduled markup hearing set for May 14. The legislation represents one of the most comprehensive efforts to establish a formal regulatory framework for the U.S. crypto industry.

BREAKING: The Senate just released new CLARITY Act draft with a stablecoin compromise allowing activity-based rewards.

Members now have until tomorrow to file amendments before Thursday’s markup. pic.twitter.com/wDLC4oNMjC

— Coin Bureau (@coinbureau) May 12, 2026

Committee Chairman Tim Scott stated that the bill “places consumers at the forefront, combats illicit finance, targets criminals and foreign adversaries, and ensures the future of finance remains in the United States.”

The 309-page document had already been circulating privately within the industry, so few surprises were anticipated. Industry stakeholders spent the night reviewing the language to verify their key priorities were included in the final draft.

The bill addresses three primary areas: rules governing stablecoin yields, protections for DeFi developers, and enhanced tools for prosecutors pursuing crypto-related money laundering cases.

Stablecoin Yield Rules Divide Banks and Crypto Firms

One of the most debated sections concerns stablecoin rewards. The current provisions prohibit crypto firms from paying interest on idle stablecoin balances, permitting only activity-based compensation.

Coinbase CEO Brian Armstrong noted on Monday that “not everyone received everything they wanted, but the essential elements were secured.” He added that Coinbase is collaborating with at least five major global banks to integrate crypto services.

However, the banking sector remains unsatisfied. American Bankers Association CEO Rob Nichols sent a letter to bank executives urging them to contact their senators prior to the vote.

Nichols cautioned that the existing wording would “unreasonably encourage the movement of bank deposits toward payment stablecoins, endangering both economic growth and financial stability.”

Banking trade organizations also submitted a separate letter to Senate Banking Committee members requesting stricter limitations on stablecoin rewards.

Research from Galaxy challenged these concerns, arguing that the majority of stablecoin expansion will stem from offshore capital flowing into U.S. banking systems, rather than domestic deposit shifts.

Ethics Provision Remains a Sticking Point

The bill currently lacks a conflict-of-interest clause that would restrict government officials from profiting from crypto. That provision falls outside the banking committee’s jurisdiction and must be incorporated separately.

Democrats have made the ethics requirement a prerequisite for their support. Senator Elizabeth Warren claimed the bill “accelerates Donald Trump’s crypto corruption,” citing at least $1.4 billion in crypto gains by the president and his family since assuming office.

White House crypto adviser Patrick Witt indicated the administration backs regulations applying equally to all government personnel but opposes measures targeting specific individuals.

Senate Republicans are expected to advance the bill along party lines during the May 14 markup. Following this, it must be combined with a version passed by the Senate Agriculture Committee before proceeding to a full Senate vote.

Sixty votes will be required on the Senate floor, meaning some Democratic backing is necessary. The White House aims for completion by July 4. Senator Kirsten Gillibrand forecasts passage by early August.

Polymarket currently assigns a 64% probability that Trump will sign the Clarity Act into law this year.