Senate Banking Committee to Markup CLARITY Act on May 14 After Stablecoin Yield Deal

*TL;DR: The Senate Banking Committee will markup the CLARITY Act on May 14 after Senators Thom Tillis and Angela Alsobrooks brokered a stable‑coin yield compromise, clearing the bill’s last major obstacle.*

Context The CLARITY Act, formally the Digital Asset Market Clarity Act, aims to split regulatory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The House passed a bipartisan version earlier this year, and the Senate now faces a narrow window: the bill must clear the full Senate by August to survive this Congress.

Key Facts - May 14 markup: The Senate Banking Committee has scheduled a markup, the formal amendment and vote process, for the CLARITY Act. - Yield compromise: Senators Thom Tillis (R‑NC) and Angela Alsobrooks (D‑MD) reached a deal allowing stablecoins to pass yield from reserve assets to token holders. This resolves the primary legal clash between banking law (which treats interest‑bearing products as deposits) and securities law (which treats them as investment contracts). - Legislative deadline: The bill must be approved by the full Senate before August to have any chance of becoming law during the current congressional session. - Market backdrop: Stablecoin market cap sits near $130 billion, with Tether (USDT) at $83 billion and USD Coin (USDC) at $45 billion. Bitcoin (ticker BTC) traded around $28,600, down 2.3% on the day, while the Nasdaq Composite (ticker ^IXIC) rose 0.7%, reflecting mixed sentiment in broader markets. - Ethics debate: A bloc of Democratic senators is pushing for ethics provisions that would restrict federal officials from holding crypto‑related positions. Republicans on the committee view the language as a potential “poison pill” that could stall the bill.

What It Means Allowing yield on stablecoins removes the most contentious regulatory gray area. If stablecoins can legally distribute interest‑like returns, they move closer to traditional money‑market funds, prompting the SEC to treat them as securities while the CFTC retains oversight of the underlying commodity functions. The compromise could satisfy traditional finance lobbyists worried about unfair competition, while giving crypto firms a clearer path to offer attractive returns. The ethics provision remains a wildcard. Should Democrats secure a modest amendment, the bill would demonstrate bipartisan viability and likely speed floor debate in June or July. Failure to reach consensus could reignite partisan gridlock, pushing the bill past the August deadline and into the next Congress.

Looking Ahead Watch the May 14 markup outcome and any ethics language added to the bill; both will shape the timeline for a full‑Senate vote and set the regulatory tone for the $130 billion stablecoin market.