The markup of the CLARITY Act in the Senate Banking Committee is set to start Thursday at 10:30 AM EST, and it is considerably more complex than the bill’s sponsors might have hoped. Thursday is the close for all amendment submissions. Crypto journalist Eleanor Terrett reports that there are already 100+ amendments filed, with it possible the number will again approach the 137 filed before January’s markup was delayed indefinitely right before it started. It’s not going to be a quick procedural walk-through today. It’s a high-stakes negotiation.
Warren’s 40+ amendments, and the one that matters most
For her part, Senator Elizabeth Warren offered over 40 amendments. She is the single biggest contributor. There’s variety, but one amendment weighs the most:
Warren has submitted a floor amendment that would prevent the Fed from opening master accounts for crypto companies. Master accounts are not an obscure technicality. They provide an institution with direct access to the U.S. payments system. In the absence of an account, a crypto company operating under the terms of the CLARITY Act would still not have access to essential banking services no matter what the bill allows. Regulatory clarity is only achieved on paper; there will be no access.
Warren brought up ethical considerations as well, stating that the bill has no provisions to prevent federal officials from profiting from the bill. She highlighted the at least $1.4B in crypto-related profit that this administration and family have generated since entering the office. Senator Kristen Gillibrand had previously said at Consensus in Miami that an ethics provision was being drafted.
Reed and Smith file the amendment most likely to fracture the committee
The most well-positioned amendment that Senators Jack Reed of Rhode Island and Tina Smith of Minnesota submitted to the mountain of amendments was designed with maximum advantage in mind. The Reed-Smith amendment implements the industry’s proposed limits on stablecoin yield, specifically those in the form of interest-like incentives “substantially similar to interest on deposit.”
Punchbowl News reported the purpose of the filing is to “force each senator on the committee into a binary, up or down, vote: pro-crypto or pro-bank.” A vote where pro-bank Republicans will have to walk a bit.
There was a separate amendment that Reed filed that also barred the use of cryptocurrencies as legal tender and would not allow taxes to be paid in crypto. This is in direct opposition to Representative Warren Davidson’s bill that passed last year allowing the use of bitcoin for such purposes.
What Saylor sees, and where BTC stands
Strategy founder Michael Saylor characterized the CLARITY Act as integral to his overarching narrative on Bitcoin acquisition strategy. With the act designating BTC & ETH as non-securities based on their role as primary assets of a spot ETP, both asset classes could receive SEC immunity and unlock vast institutional investment funds. Furthermore, Saylor singled out the recognition of activity-based compensation in DLTs as crucial for “responsible digital yield markets.”
Bitcoin is currently trading at $79,701, down 0.99 percent on the 24-hour timeframe and 10.18 percent YTD, while it is up 17.73 percent on 90-day terms. Market cap is $1.60T with $31.59B on the 24h timeframe. No breakout is priced in; however, a clear committee increase removes a significant uncertainty.
The infrastructure question underneath the politics
The CLARITY Act could still get out of committee on a party-line vote, but it significantly hurt its chances at the 60-vote threshold for cloture in the Senate. Big labor organizations like SEIU, AFT, NEA and AFSCME have already called on the Senate to vote it down. In the case of the committee approves the bill on Thursday, final floor vote is expected for June or July.
The deeper consequence of continued stalls is not the immediate price impact. Renna Ba, Head of Ecosystem at Morph, told The Coin Headlines about just what’s riding on this vote.
“The failure of the CLARITY Act is not just a setback for the crypto industry. It has a ripple effect on global commerce and the people who need better payment infrastructure most will feel it first. Stablecoins have already proven their utility as programmable, dollar-backed instruments for real payments payroll, remittances, merchant checkout, cross-border treasury.”
Renna went on to say that, “Reality does not reverse without legislation. What does stall is the bridge between what we have built and the traditional financial institutions, payment operators, and enterprise businesses that are ready to integrate but need a clear regulatory framework before they can commit. Without the CLARITY Act, banks, card networks, and payment processors face unresolved questions about how stablecoin instruments are classified, which regulator they answer to, and what compliance obligations apply. Those questions don’t make stablecoins less useful. They make the legal path to adopting them harder to navigate and for institutions managing fiduciary responsibility, harder to navigate often means not yet.”
