Battle Over Clarity Act Moves to the Senate Floor

The Senate Banking Committee advanced the Digital Asset Market Clarity Act by a 15–9 vote. As the bill moves to the Senate floor, sharp policy disagreements among legislators persist.

Senate Banking Committee Chair Tim Scott said years of regulatory uncertainty and "regulation by enforcement" had driven digital asset innovation overseas, left U.S. investors exposed, and made law enforcement's job harder. He said the bill's three goals were American priorities rather than partisan ones and that the legislation reflected months of bipartisan negotiation—though the vote was largely along partisan lines, with only Democratic Senators Ruben Gallego and Angela Alsobrooks joining all Republicans.

Senator Elizabeth Warren identified significant problems with the bill, saying it puts U.S. investors, consumers, the financial system, and national security at risk. She said the bill would weaken federal securities law and could expose investor assets, including pension assets. She argued the bill would preempt a large number of state-level fraud protections and would put the financial system at risk by allowing banks to take on risky debt exposures in ways she compared to pre-2008 practices. On national security, Ms. Warren said the bill would not adequately close enforcement gaps. Further, she said the bill does not address crypto-related conflicts of interest involving the Trump administration. Ms. Warren recalled that Republicans had promised to close national security loopholes, address ethics issues, and fix the stablecoin yield issue in a follow-on bill, but said the bill before the Committee did not deliver on those promises.

Ms. Warren also objected on procedural grounds, noting that Chair Scott had ruled more than a dozen Democratic and Republican amendments out of order, including a fix requested by the National Sheriffs' Association to address anti-money-laundering enforcement against decentralized platforms and an amendment sought by community banks to address deposit flight. She also said the Committee held no public hearing on the bill despite calls from a number of Committee members.

House Financial Services Committee Chair French Hill and House Agriculture Committee Chair Glenn "GT" Thompson welcomed the Committee's vote to advance the bill and said it would bring long-overdue certainty to the digital asset ecosystem. Mr. Hill and Mr. Thompson said they would continue working with the Senate Banking Committee to finalize the legislation before Senate floor consideration.