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Senate Banking Committee Releases New Version of the CLARITY Act
- The U.S. Senate Banking Committee will vote on a new version of the crypto market structure bill, the CLARITY Act, on May 14.
- Ahead of the vote, the committee released the full text of the bill.
- Among other provisions, the legislation includes a complete ban on paying yield for simply holding stablecoins, similar to interest-bearing bank deposits.
- Despite this compromise, the banking lobby remains dissatisfied.
The full bill spans 309 pages. Committee representatives stated that the updated version is the result of lengthy negotiations between Republicans, Democrats, banking lobbyists, and cryptocurrency industry representatives.
“Over the past year, we listened to citizens, negotiated, and refined this legislation because families, small businesses, investors, and innovators all benefit from clear rules of the road,” said Committee Chairman Tim Scott.
Among other things, the bill introduces:
- mandatory AML/CFT programs for service providers;
- customer identification through KYC procedures;
- monitoring and flagging of suspicious transactions;
- recordkeeping requirements;
- OFAC sanctions compliance;
- internal compliance policies, employee training, and independent audits.
The legislation also outlines requirements for crypto ATM providers, staking operators, and custodians.
Additionally, the bill protects DeFi developers from potential liability arising from the misuse of their products.
A Compromise Solution
The payment of rewards solely for holding stablecoins is explicitly prohibited under Section 404.
Both issuers and regulated intermediaries would be prohibited from:
- paying interest on stablecoin balances;
- marketing stablecoins as yield-bearing deposits;
- sharing reserve income with token holders.
The bill emphasizes the distinction between stablecoins as payment instruments and investment products.
However, it still permits rewards tied to specific activities, provided they are structured as separate services.
It is worth noting that stablecoin regulation was the primary obstacle preventing earlier versions of the CLARITY Act from advancing.
Earlier in May, committee members announced that a compromise had been reached, although banking lobby groups remained dissatisfied.
On May 11, 2026, Senator Bernie Moreno stated that American Bankers Association CEO Rob Nichols had circulated letters urging colleagues to intervene and block the initiative.
Coinbase Chief Legal Officer Paul Grewal responded to the situation by saying:
“Perhaps the CEO failed to understand what people who were actually present in the White House meetings repeatedly told him. We already had the ‘immediate engagement.’ You got the elimination of ‘idle yield.’ I know because I was there — and you were not. Take ‘yes’ for an answer. Move on. Stop wasting the Senate’s time and the American people’s time.”
The vote on this version of the bill is scheduled for May 14, 2026.
However, passage of the legislation is still not guaranteed, as concerns regarding conflicts of interest remain unresolved.
See also: "Crypto Security Firm Warns Altcoin Users: “Hackers Have Found a New Method”"
