Senate Republicans Unveil Updated CLARITY Act Draft Ahead of Markup

Overall, the bill, introduced in the Senate by Banking Committee Chairman Tim Scott (R-SC), would create rules for how digital assets are regulated in the US, including when tokens fall under securities laws and how crypto firms must comply with anti-money laundering requirements.

The updated measure adds a provision to exempt crypto companies from reporting regulations on yearly capital raises of up to $50mn a year for four years. It also includes a change sought by the banking industry that would prohibit institutions from offering yield on passively held stablecoins.

The bill passed the House with bipartisan support in July 2025, but has faced delays in the Senate since. 

The proposal comes as crypto companies and institutional investors continue to call for clearer rules around crypto after years of uncertainty over whether the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC) should have main oversight of  crypto in the US.

Time is running short for the Republican-championed measure given at least one of the houses of Republican-controlled Congress is expected to change hands as a result of November's mid-term elections. So, if passage doesn't come soon, the measure would likely have to wait at least until the next Congress to be considered again.

The Senate Banking Committee is expected to review the amended legislation during a markup hearing on 14 May.   

What's in the draft?

The proposal introduces a new exemption called "Regulation Crypto," allowing companies to raise up to $50mn per year for four years without following the full set of "burdensome" US securities rules. The proposal noted that total fundraising under the exemption would be capped at $200mn.

The newly updated bill also includes new provisions focused on decentralized finance (DeFi), stablecoins, and self-custody wallets.

One of the most closely watched new provisions, regarding stablecoins, would stop crypto firms from offering passive, bank-style interest on payment stablecoins. However, certain transaction-based rewards could still be allowed under future SEC, CFTC, and Treasury rules.

Another new section states that federal agencies cannot restrict users from holding digital assets in self-hosted wallets.

The proposal already would require digital commodity brokers, dealers, and exchanges to comply with anti-money laundering (AML) and customer due diligence rules under the Bank Secrecy Act.

Support... and backlash 

Supporters of the bill said the proposal could help reduce years of regulatory uncertainty surrounding digital assets in the US.

"The updated CLARITY Act is probably the clearest sign yet that U.S. policymakers are starting to understand the difference between protecting consumers and slowing innovation," Alexis Sirkia, Chairman and Co-founder of Yellow Network, told Sandmark.

Sirkia pointed to the stablecoin provisions as a good example of how regulators are starting to treat crypto rewards differently from traditional bank interest products. 

"Institutions need clarity before they commit meaningful capital. Most large firms are not avoiding digital assets because they dislike the technology. They’re avoiding uncertainty," he said. 

He also said clearer SEC and CFTC oversight could help reduce operational uncertainty for crypto firms.

"The reality is that crypto is global. Builders and liquidity move very fast toward environments that are easier to operate in," Sarkia added. "If the US wants to lead in digital finance, stablecoins, and tokenized markets, it needs frameworks that allow companies to actually build there."

Strategy (formerly MicroStrategy) founder Michael Saylor also praised the proposal, particularly its treatment of stablecoin rewards and digital yield markets.

"The key language: the bill recognizes activity-based rewards tied to payment stablecoins and distributed ledger participation as ‘critical to enabling innovation, competition, and consumer adoption'," Saylor wrote on X.

He added that the legislation could help "unlock the next wave of Digital Capital, Digital Credit, and Digital Equity" in the US and globally.

However, not everyone agrees with the latest proposal. Senator Elizabeth Warren (D-MA), the top Democrat on the Senate Banking Committee, criticized the bill for not including ethics provisions that could be applied to US President Donald Trump’s crypto businesses.

"This bill puts investors, our national security and our entire financial system at risk – and it will turbocharge Donald Trump’s crypto corruption," Warren said in a statement Tuesday. 

She added that the bill included "zero provisions" addressing what she described as conflicts tied to Trump and his family’s crypto ventures. Warren said that in just one year in office, "the President and his family have raked in at least $1.4bn in gains from crypto deals alone." 

Warren is one of several lawmakers who have expressed concerns over a lack of ethics provisions in the CLARITY Act.