The CLARITY Act, the much awaited U.S. crypto market structure bill, was passed by the Senate Banking Committee on Thursday. This makes for a landmark development in defining the backbone of the U.S. digital assets ecosystem. During the high-stakes markup session, 15 out of the 24 Senate Banking Committee members voted in favour of the draft bill. BTC hit the price point of $82,000 immediately after CLARITY was passed in Thursday’s markup.
All Committee members from the Republican party voted “yes” for the draft bill. Senator Ruben Gallego representing the state of Arizona and Senator Angela Alsobrooks became the two committee members from the Democratic party to vote in favour of the bill despite the other Democrats voting a “no”.
Senators Thom Tillis and Cynthia Lummis are co-sponsoring the bill. During the markup session, their contribution to advancing the bill with “thousands of hours” put in was repeatedly appreciated by Senator Tim Scott, who serves as the chairperson of the Senate Banking Committee.
Commenting on the development Senator Tillis said, “The CLARITY Act passed by the Senate Banking Committee is a strong bipartisan compromise to provide the regulatory certainty needed to advance financial innovation.”
Senator Lummis said the progress in CLARITY Act’s advancement will be pivotal in retaining America’s Web3 talent within its borders.
Democrats, led by Senator Chris Van Hollen and Ranking Member Elizabeth Warren have demanded strict language be added to the proposed bill to ensure that government officials and their families are not allowed to profit from the crypto industry by issuing their own tokens and currencies.
In conversation with The Coin Headlines, Donald Davhie, research associate at the Centre for Risk Analysis (CRA) called CLARITY Act’s advancement through the Senate Banking Committee a watershed moment in American financial policymaking, signaling cryptocurrency’s institutionalisation as a mature asset class.
“By forging a decade-long dual-regulator framework granting CFTC primacy over decentralised digital commodities while preserving SEC authority over securities-like tokens, and layering DeFi safe harbours atop the GENIUS Act’s stablecoin regime, the legislation resolves years of regulatory ambiguity that chilled innovation and drove capital offshore,” Davhie noted.
This lack of the clear ethics provision could become a roadblock for the bill’s passage during the full Senate vote the exact timeline of which remains unknown for now. Republican representative Tim Scott said these rules should be added as amendments when the bill is debated by the full Senate
Crypto industry reacts
The crypto community has been watching developments regarding the passage of the bill with bated breath and unsurprisingly most were ecstatic with the CLARITY Act clearing this Banking Committee’s markup.
“CLARITY is emerging – digital tokens and blockchain protocols, read/write/own, stablecoin utility, open infra that the whole financial industry can build own,” said Jeremy Allaire, the co-founder and CEO of Circle.
Coinbase CEO Brian Armstrong, who had opposed the January draft of the bill over its controversial ban on stablecoin yields, also expressed gratitude for committee members who voted in favour of the bill. After Armstrong’s push-back last time, the bill was reworked to allow yield generation on stablecoin holdings if investprs were using these tokens for staking, liquidity, or expenditure purposes.
“Regulatory clarity is good when it gives builders and users clear rules without turning self-custody into a permissioned activity. The CLARITY Act is a step in the right direction as it draws clean jurisdictional lines and protects open-source, non-custodial software,” Vikrant Sharma, Co-founder of Cake Labs, told The Coin Headlines. Sharma essentially acknowledged that under the CLARITY Act, Web3 developers, node operators, and wallet service providers will not be treated as “money transmitters” making a big win for the DeFi sector.
SEC chairperson Paul Atkins and CFTC chief Michael Selig also chimed-into the CLARITY-related celebrations online to welcome this crypto market structure bill into the next stage.
What lies ahead
The legislation will now move towards a merger with a companion bill drafted by the Senate Agriculture Committee, a markup of which was approved earlier in January.
Now that both, the Senate Banking and Agriculture committees have wrapped up the respective markups of their individual bills, the two different versions of the bill will need to be merged into one — which will then head to the floor for the full Senate vote later.
The U.S. policymakers wish to present this bill to President Donald Trump by July 4 to commemorate 250 years of independence for the U.S.
Senator Ruben Gallego from the Democratic party said while establishing strong ethics guardrails is essential before the bill heads to the Oval Office, its present draft closes many gaps around regulatory jurisdictions, consumer protection, and stablecoin yield among others.
The full Senate vote for the CLARITY Act will involve all 100 members of the U.S. Senate. The Senate rules allow the opposing side to block the vote indefinitely unless 60 members agree to move it forward. At present, Republicans hold 53 seats at the Senate and could be seven votes short of being able to control the final decision.
A statement from President Trump on the development remains awaited for now as he is in China for a high-stakes meeting with President Xi Jinping around topics including trade, tech, and the disruptions caused in the Strait of Hormuz due to the Iran war.
The overall crypto market, meanwhile, brimmed in greens as of press time, reacting to the development in the CLARITY Act advancement.
Bitcoin, at the time of writing, was trading at $81,938 after briefly hitting $82,000. Ether, Tether, XRP, Tron, Dogecoin, Hyperliquid, Cardano, and LEO are among the majority crypto tokens trading in profits at the time of writing, CoinMarketCap data showed.