The full draft of the Digital Asset Market CLARITY Act landed shortly after midnight on Tuesday ahead of a markup scheduled for Thursday at 10:30 — and the conflict-of-interest carve-out is the provision likely to decide whether the bill clears the floor.
The Senate Banking Committee released the full 309-page draft of the Digital Asset Market CLARITY Act shortly after midnight on Tuesday, May 11, and senators filed more than 100 amendments before the markup hearing scheduled for Thursday morning at 10:30. Senator Elizabeth Warren alone submitted forty of those proposed changes. Senator Tim Scott, the committee chair, is whipping against most of them.
The text is the version that emerged from three months of closed-door negotiations between Senators Tillis, Scott, Lummis, Warner, Alsobrooks, and Gillibrand, and it is meaningfully different from the House version of the bill passed last summer. Stablecoin reserve assets are limited to short-dated Treasuries under 90 days, overnight repurchase agreements, and a narrow set of cash-equivalent instruments. Bank-style passive yield on stablecoin deposits is banned for any issuer that is not a chartered bank. Activity-based rewards — staking, liquidity provision, governance participation, loyalty programmes — are permitted, which is the compromise the crypto exchanges wanted and which the bank lobby has spent six weeks trying to reopen.
The market-structure provisions are denser. SEC jurisdiction is preserved over token sales and over the underlying network during what the bill calls the non-mature phase. CFTC jurisdiction attaches to spot markets for tokens that pass a "mature blockchain test" — a multi-factor decentralisation standard whose specifics will require SEC and CFTC rulemaking to finalise. The Federal Reserve and state banking regulators share jurisdiction over payment stablecoins. The hand-off mechanism between SEC and CFTC for a token transitioning from one regime to the other is detailed across forty pages and has already drawn comments from both Coinbase's general counsel and the Cleary Gottlieb digital-assets practice that the boundary conditions are workable but not yet clean.
Warren's amendments fall into three buckets. The first attempts to strip the conflict-of-interest carve-out that effectively exempts executive-branch officials and their family members from divestment requirements covering crypto holdings — a provision that has been sitting in the bill since drafters tried to find language acceptable to the White House. The second restores the SEC's authority over secondary-market token trading at the boundary the House bill carved out. The third extends Bank Secrecy Act obligations to DeFi protocols at a level the industry has spent two years lobbying against. None of the three has 12 committee votes lined up behind it. All three will dominate the markup hearing.
The yield compromise is the part that mattered most to get the bill out of committee. Banking trade groups — the ABA, Independent Community Bankers, the Bank Policy Institute, the Mid-Size Bank Coalition, and the Consumer Bankers Association — escalated their opposition in a joint letter on Friday, arguing that activity-based rewards on stablecoins are functionally identical to deposit interest and would siphon deposits out of community banks. The compromise text answers that argument by drawing the legal line at "bona fide activity," which means a stablecoin holder cannot earn rewards merely for holding the token; some on-chain action — staking, providing liquidity, casting a governance vote — has to be performed. In practice, exchanges will design loyalty programmes that meet the test with minimal user friction, and the banking groups know it. Lummis and Tillis spent the last fortnight walking individual Republican senators through the language line by line.
If the bill clears the Banking Committee on Thursday — which the Galaxy government-affairs team currently has at roughly 60-40 odds — it still has to be merged with the Senate Agriculture Committee version approved earlier this year, and the merged text needs 60 votes on the Senate floor. The conflict-of-interest provision is the single largest obstacle to those 60 votes. Senate Democrats who would otherwise back the framework on its merits are publicly unwilling to vote for a bill that exempts the Trump family from disclosure obligations covering crypto holdings. That fight has not been resolved. The committee vote on Thursday will not resolve it; the floor vote, whenever it happens, will.
For the industry, the bill is the closest thing to comprehensive regulatory certainty Washington has produced for digital assets. The SEC's March 17 interpretive release and the SEC-CFTC MOU signed on March 11 have already done much of the agency-level groundwork that the legislation will codify, and the SEC has separately signalled an innovation exemption for tokenised securities coming within weeks. Without the statute, the next administration could simply reverse those interpretations. With it, the framework becomes durable enough for institutional capital to plan around three- to five-year horizons.
The opposition is not only Democratic. A bloc of three or four moderate Republicans — Hagerty, Rounds, and the two newer senators from Pennsylvania and Michigan — have privately raised concerns about the speed at which the CFTC would have to build out a digital-commodity supervision arm. The CFTC is currently funded at roughly one-eighth of the SEC's budget and has approximately one-tenth of the SEC's headcount. Handing it primary jurisdiction over spot crypto markets without a corresponding appropriations increase is a problem nobody has solved yet, and Senator Lummis has indicated she may introduce a managers' amendment on the floor to address the funding gap.
The bank lobby will keep pressing the yield question. The progressives will keep filing amendments. Whether the bill clears the Senate this year still depends on whether Tim Scott can hold 12 committee votes through the markup and 60 on the floor with the conflict-of-interest provision intact. Galaxy's policy team was already calling 2026 passage a coin flip a fortnight ago before the 309 pages and the 100 amendments landed.
The amendments are public. The markup is open. The number to watch on Thursday at 10:30 is 12 yeses.
