WASHINGTON — Congress is back in session this week, and Senate Banking Committee Chairman Tim Scott has said the committee will vote Thursday on the long-awaited CLARITY Act, legislation that would establish a regulatory framework for digital assets and define oversight responsibilities for federal financial regulators.
The committee’s executive session is scheduled for May 14 at 10:30 a.m. in the Dirksen Senate Office Building, according to the Senate Banking Committee calendar and multiple news reports.
As the CU Daily has been reporting, the Digital Asset Market Clarity Act of 2025, commonly known as the CLARITY Act, is designed to clarify when cryptocurrencies and other digital assets are regulated as securities or commodities, while dividing oversight authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
The House approved its version of the legislation in July 2025 with bipartisan support, but Senate negotiations have stretched for months amid disagreements over stablecoin provisions, ethics standards and anti-money laundering requirements.
Key Sticking Point
As the CU Daily has also been reporting, one of the key sticking points has involved whether stablecoin issuers can provide rewards or yield-like incentives to customers. Banking industry groups have argued such provisions could pull deposits away from traditional banks, while crypto firms contend restrictions would hinder innovation and competition.
Reuters reported that a compromise under discussion would prohibit rewards on idle stablecoin holdings while still allowing incentives tied to payment activity.
The legislation has become a major priority for the cryptocurrency industry, which has pushed Congress to create clearer federal rules after years of regulatory disputes between the SEC and CFTC. Industry supporters argue the lack of a consistent framework has created uncertainty for digital asset companies operating in the United States.
Potential Hurdles
The bill also faces political hurdles. Reuters reported that Democratic lawmakers continue to raise concerns over consumer protection, illicit finance and potential conflicts of interest tied to digital asset investments. The measure will likely require support from at least some Senate Democrats to advance through the full chamber.
Scott has recently signaled growing momentum behind the legislation, calling the measure “in the red zone” during recent television appearances discussing crypto market structure legislation.
‘We Agree to Disagree’
Crypto companies including Coinbase are now on board after Sens. Thom Tillis (R-NC) and Angela Alsobrooks (D-MD)_ released a compromise proposal on how crypto companies could offer rewards to stablecoin users that wouldn’t compete with yields banks offer for deposits.
Yet groups representing both commercial and community banks say the language “falls short” of protecting banking deposits.
Tillis acknowledged in a post on X that while banks might not be happy with the language ” we respectfully agree to disagree.”
Also on the Congressional Agenda
Separately, this week, according to America’s Credit Unions”
- The House has indicated an upcoming floor vote on the Supervisory Modifications for Appropriate Risk-Based Testing (SMART) Act, which was introduced by Rep. William Timmons (R-SC) and would provide well-managed, well-capitalized credit unions with regulatory relief through combined safety-and-soundness exams and consumer compliance exams, as well as allowing for limited-scope, off-site exams in alternate years.
- The House Financial Services Committee will also hold a markup starting Wednesday on legislation covering AI, protecting seniors from scams, and more. America’s Credit Unions noted it has previously provided comments to the committee on several bills on the markup agenda, including support for the Unleashing AI Innovation in Financial Services Act (H.R. 4801), which would create regulatory sandboxes for AI test projects at financial regulatory agencies; and support for the Artificial Intelligence Practices, Logistics, Actions, and Necessities (AI PLAN) Act (H.R. 2152), which would require the Secretaries of the Treasury, Homeland Security, and Commerce to develop a strategy to defend against national security risks posed by AI in financial crime. America’s Credit Unions said it is encouraging expanding the bill to include a role for financial regulators such as the NCUA.
