Come On, Baby, Let's Do the Twist🪆
A bill is currently working its way through the United States Senate that, if passed, would fundamentally change how digital assets are regulated in the country. It is called the Digital Asset Market Clarity Act of 2025, and it has been in various stages of becoming law for nearly a year. This week, it hits one of the most consequential checkpoints yet.
The core problem the CLARITY Act aims to address is a longstanding turf war that has been ongoing for years. Both the Securities and Exchange Commission and the Commodity Futures Trading Commission have claimed authority over digital assets, and they have rarely agreed on where one agency's reach ends and the other's begins. The result has been what regulators and industry lawyers both describe as regulation by enforcement — meaning the rules get written after the lawsuit, not before. The CLARITY Act would draw a clear line: the CFTC gets exclusive jurisdiction over spot markets for digital commodities, and the SEC retains authority over investment contract assets. This matters to anyone participating in digital asset markets, from large exchanges down to hobbyist faucet users, because it determines who writes the rules everyone will eventually have to follow.
Where It Stands
The House passed H.R. 3633 on July 17, 2025, by a 294-to-134 margin — a bipartisan vote that gave the bill real momentum. The Senate has been the slower stage. The Senate Agriculture Committee advanced its own related bill, the Digital Commodity Intermediaries Act, in January 2026. The Senate Banking Committee has been working through a separate draft covering SEC jurisdiction and broader market structure issues. Those two drafts eventually need to be merged, then that merged version needs 60 votes in the full Senate, then any text that differs from the House bill goes back to the House for re-approval. That is a long runway, and several things can still go wrong along it.
Legislative Timeline at a Glance
▪︎ May 29, 2025 — CLARITY Act introduced in the House
▪︎ July 17, 2025 — House passes the bill 294–134
▪︎ Jan. 29, 2026 — Senate Agriculture Committee passes its companion bill
▪︎ May 12, 2026 — Senate Banking Committee releases 309-page revised draft
▪︎ May 13, 2026 — Amendment filing deadline for Senate Banking Committee
▪︎ May 14, 2026 — Senate Banking Committee markup scheduled
What Happens This Week
The Senate Banking Committee released a 309-page revised draft just after midnight on Tuesday, May 12. Senators had until the close of business yesterday, May 13, to file amendments. The committee's markup session is scheduled for Thursday, May 14. A markup is not a final vote — it is the process by which a committee formally considers and amends a bill before sending it to the full chamber. Getting out of committee is a necessary step, not a finishing line.
Two issues remain contentious. The first is stablecoin yield: specifically whether digital asset platforms can offer users interest for simply holding stablecoins, which banks argue looks too much like a deposit product that should be regulated as one. A bipartisan compromise was proposed in early May to restrict those arrangements, and it may surface as an amendment this week. The second is a conflict-of-interest provision targeting government officials who profit from digital asset markets. Democrats want it in the bill. The White House has said it will not accept language that singles out the president. That standoff is not resolved, and it remains a potential vote-killer when the bill reaches the full Senate.
The DeFi provisions, by contrast, appear to be holding. The current draft maintains protections for software developers who do not directly control user funds, keeping them outside the definition of money transmitters. That is a significant detail for anyone participating in decentralized platforms or self-custody arrangements, and the DeFi Education Fund has indicated cautious approval of those provisions while pledging to monitor this week's amendments closely.
What to realistically expect by the end of this week: the Senate Banking Committee will likely advance some version of the CLARITY Act out of markup. That is not the same as the bill becoming law. The Banking and Agriculture Committee versions still need to be merged, and the full Senate vote — with its 60-vote threshold — is still ahead. Treasury Secretary Bessent has called spring 2026 his target for passage. That timeline is tight, but Thursday's markup will tell you whether it is still plausible.
