U.S. senators are set to review a long-awaited bill that would create rules for cryptocurrency next week. This could end a long disagreement over the bill, which has put crypto companies against U.S. banks. The bill, called the Clarity Act, would, if it becomes law, make it clear which financial regulators oversee the growing crypto sector. This could help more people and businesses use digital assets.
U.S. Senator Tim Scott, who chairs the Senate Banking Committee, announced on Friday that the committee will hold a meeting on May 14 at 10:30 a.m. (2:30 PM GMT) in Washington, D.C.
The crypto industry has been pushing hard for this law. They say it’s essential for the future of digital assets in the U.S. and needed to fix major, long-standing problems for crypto companies. Among other things, the bill would define whether crypto tokens are securities, commodities, or something else, giving the industry legal clarity.
The bill also includes a rule aimed at settling a big fight between crypto companies and banks. Under a compromise worked out by Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks, companies would not be allowed to offer rewards to customers for simply holding dollar-backed crypto tokens (known as stablecoins). This is because these rewards look too much like bank deposits.
However, rewards for other activities involving stablecoins, such as sending a payment, would still be allowed. Banking trade groups have opposed this rule. They say it gives crypto companies too much freedom and could move deposits away from the regulated banking system.
Banks have made a last-ditch effort to get some Republican support on the Senate Banking Committee before the hearing. It’s unclear if they will succeed. Lobbyists for the banking industry have been trying to get a fix in the Clarity Act. They want to close a “loophole” from a law passed last year that lets intermediaries pay interest on stablecoins. Banks worry this would lead to money leaving insured bank accounts, possibly threatening financial stability.
Crypto companies, on the other hand, argue that stopping third parties, like crypto exchanges, from paying interest on stablecoins would be unfair and anti-competitive. The industry hopes the Clarity Act passes in the coming months before the November midterm elections, where Democrats could gain control of the House of Representatives.
The House of Representatives passed its version of the Clarity Act in July last year. However, the Senate needs to pass the bill by the end of 2026 to send it to President Donald Trump’s desk. Many Democrats in Congress have opposed the bill. They argue it’s too weak on rules against money laundering and should do more to prevent politicians from profiting from crypto ventures.
The bill would need support from at least seven Democrats in the full Senate to pass. President Trump has sought money from the crypto industry, promising to be a “crypto president.” His family’s own crypto ventures have also helped bring the sector into the mainstream.
