Senate Banking Committee Advances CLARITY Act 15-9, Exposing Crypto Policy Divide

TL;DR: The Senate Banking Committee approved the CLARITY Act by a 15‑9 margin, moving the bill toward a federal framework for digital assets. An amendment by Senator Elizabeth Warren to close a tokenization loophole fell 11‑13, while banking groups urged stricter limits on stablecoin interest‑like rewards to protect deposits.

The CLARITY Act seeks to delineate whether a digital asset is treated as a security or a commodity, assigning clearer jurisdiction to the SEC and CFTC. It also sets disclosure rules, compliance standards for tokenization and decentralized finance, and addresses stablecoin rewards. The markup on May 14 marked the most significant congressional step yet toward regulating the crypto sector.

The markup featured heated exchanges over how to treat decentralized finance platforms and tokenized assets. Two Democrats, Senators Ruben Gallego and Angela Alsobrooks, crossed party lines to support the measure, signaling a rare moment of cross‑aisle agreement on crypto policy.

The committee vote was 15 in favor, 9 opposed, with two Democrats joining Republicans to advance the bill. Senator Warren’s amendment targeting a tokenization loophole was defeated 11‑13; Republicans argued existing safeguards already prevent misuse. Separately, industry representatives from the American Bankers Association warned that the bill’s current limits on stablecoin interest‑like payments are insufficient and could cause a drain of deposits from traditional banks.

The outcome shows a bipartisan willingness to create baseline rules for digital assets, yet it also reveals fault lines. Supporters view the act as a path to integrate crypto into the regulated financial system, while critics contend it legitimizes decentralized infrastructure before robust enforcement tools are in place. Banking concerns about deposit stability suggest further tweaks may be needed before final passage.

The bill will proceed to the full Senate floor, where amendments on stablecoin rewards and DeFi oversight are likely to resurface, and any changes could shape the final regulatory landscape for digital assets.