US Senate Committee set to consider long-awaited crypto bill next week
· CNA · JoinRead a summary of this article on FAST.
Get bite-sized news via a new
cards interface. Give it a try.
Click here to return to FAST Tap here to return to FAST
FAST
May 8 : U.S. senators are set to consider long-awaited legislation that would create a regulatory framework for cryptocurrency next week, potentially ending a deadlock over the bill that pitted crypto companies against U.S. banks.
The bill, dubbed the Clarity Act, would, if signed into law, clarify financial regulators' jurisdiction over the burgeoning sector, potentially boosting digital asset adoption.
U.S. Senator Tim Scott, chairman of the Senate Banking Committee, said on Friday the panel would hold an executive session on May 14 at 10:30 a.m. (1430 GMT) in the Dirksen Senate Office Building in Washington, D.C.
The crypto industry has been pushing for the legislation, saying it is existential to the future of digital assets in the U.S. and necessary to fix core, longstanding problems for crypto companies. Among other things, the legislation would define when crypto tokens are securities, commodities or otherwise, giving the industry legal clarity.
CNA Games
Guess Word
Crack the word, one row at a time
Buzzword
Create words using the given letters
Mini Sudoku
Tiny puzzle, mighty brain teaser
Mini Crossword
Small grid, big challenge
Word Search
Spot as many words as you can
Show More
Show Less
The bill also includes a provision aimed at settling a heated dispute between crypto companies and the banking industry. Under the compromise brokered by Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks, customer rewards on idle holdings of dollar-backed crypto tokens known as stablecoins would be prohibited, given their resemblance to bank deposits.
Rewards on other activities associated with stablecoins, such as sending a payment, would be permitted. Banking trade groups have pushed back on this provision, saying it gives crypto companies too much latitude and could shift deposits away from the regulated banking system.
Banks have launched a last-ditch effort to peel support from some Republicans on the Senate Banking Committee before the hearing, but it is unclear if they will be able to do so.
Lobbyists for the banking industry have been seeking a fix in the Clarity Act to close a "loophole" stemming from legislation signed into law last year that allows intermediaries to pay interest on stablecoins. Banks say this would lead to a flight of deposits from the insured banking system, potentially threatening financial stability.
Crypto companies say that prohibiting third parties, such as crypto exchanges, from paying interest on stablecoins would be anti-competitive.
The industry hopes the Clarity Act gets passed in the coming months before the November midterm elections, in which Democrats could wrest control of the House of Representatives.
The House passed its version of the Clarity Act in July last year, but the Senate needs to pass the bill by the end of 2026 in order to send it to President Donald Trump's desk.
Many congressional Democrats have been opposed to the bill, arguing it is too weak on anti-money laundering provisions, and that it should do more to prevent political officials from profiting from crypto ventures.
The bill would need support from at least seven Democrats in the full Senate to gain approval.
President Trump courted industry cash, pledging to be a "crypto president," and his family's own crypto ventures have helped to propel the sector into the mainstream.
Newsletter
Week in Review
Subscribe to our Chief Editor’s Week in Review
Our chief editor shares analysis and picks of the week's biggest news every Saturday.
Sign up for our newsletters
Get our pick of top stories and thought-provoking articles in your inbox
Get the CNA app
Stay updated with notifications for breaking news and our best stories
Get WhatsApp alerts
Join our channel for the top reads for the day on your preferred chat app