A crypto market structure bill that had been stuck in Washington for months is now moving again, and Coinbase CEO Brian Armstrong says it could materially reshape the U.S. financial system. Armstrong publicly backed the Digital Asset Market Clarity Act of 2025, widely referred to as the CLARITY Act, describing it as a “true compromise” that balances the priorities of the crypto industry with the concerns of the traditional banking sector.
His comments, reported through Fox News, came just as the Senate Banking Committee prepared for a May 14 markup of the legislation. That matters because it would mark the first formal committee vote on the bill in the Senate after months of procedural delay, extended negotiations, and two cancelled markups. Senate Banking Committee Chairman Tim Scott has set a target of June or July 2026 for a full Senate floor vote, while the White House has reportedly aimed for a presidential signature by July 4.
In other words, the bill is no longer a niche policy discussion. It has become part of a broader federal timetable with implications for crypto regulation, banking competition, and the future structure of digital asset markets in the United States.
Why the CLARITY Act has become a pivotal U.S. crypto bill
The CLARITY Act is formally designated H.R. 3633, the Digital Asset Market Clarity Act of 2025. It passed the House of Representatives on July 17, 2025, by a 294–134 bipartisan vote. All 216 House Republicans supported it, and 78 Democrats crossed party lines. That vote alone signaled that the measure had moved beyond a purely partisan framework and had developed meaningful cross-party backing.
Still, its path through the Senate has been much slower. After clearing the House, the bill sat in the Senate Banking Committee while lawmakers dealt with two cancelled markups, prolonged stablecoin negotiations, and an increasingly intense lobbying battle between crypto firms and Wall Street banks. The delay was not simply procedural. It reflected a deeper conflict over regulatory turf, market access, and the distribution of power between incumbents and crypto-native companies.
At the heart of the legislation is a new division of authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Under the bill, the CFTC would receive exclusive jurisdiction over spot and cash markets for digital commodities, while the SEC would maintain authority over investment contract assets and primary market fundraising. That is one of the most consequential features of the proposal, because it attempts to resolve the long-running question of which federal regulator should control different classes of digital assets.
Stablecoins would not be treated as a simple subset of either bucket. Instead, they would be carved out as a separate category under shared oversight. That approach reflects the hybrid role stablecoins play in payments, settlement, dollar representation, and digital market infrastructure.
The Senate version of the bill is also broader than the original House text. It has expanded to nine titles and now includes provisions on DeFi protections, illicit finance, bankruptcy safeguards for crypto customers, and the Blockchain Regulatory Certainty Act. That companion component is particularly important for software developers because it creates safe harbors for developers who publish code without controlling customer funds. If enacted, such language could meaningfully affect how the U.S. treats open-source builders, wallet infrastructure, and other non-custodial software participants.
Why stablecoin yield became the bill’s central battlefield
The single most contested policy issue in the bill was stablecoin yield. Banks argued that if crypto platforms were allowed to pay rewards on stablecoin balances in a way that resembled interest, deposits could migrate out of traditional bank accounts. In their view, that would threaten core lending operations by reducing the deposit base that supports credit creation.
Crypto firms, led prominently by Coinbase, framed the issue very differently. They argued that broad restrictions would unfairly hand banks a structural competitive advantage and deny Americans access to newer financial tools built around on-chain dollars and digital payment systems. From the industry perspective, the policy question was not just about product design. It was about whether crypto innovation would be forced to remain subordinate to legacy banking models.
The eventual compromise was brokered by Senator Thom Tillis (R-NC) and Senator Angela Alsobrooks (D-MD). Under the final language in Section 404, stablecoin issuers and affiliated digital asset service providers would be barred from paying yield on balances if that yield is the functional or economic equivalent of bank interest. This language was crafted to prevent stablecoin products from replicating traditional interest-bearing deposit accounts.
At the same time, the bill does not ban every form of incentive. Activity-based rewards remain permitted, including cashback on payments, transaction-based incentives, and rewards tied to commercial activity. The practical distinction is clear: if a stablecoin holder takes no action, the balance should not generate a passive return. But if the holder uses the asset in payments or commerce, some forms of reward can still exist.
That compromise was enough for Coinbase to publicly support the bill. After the text was released, Armstrong confirmed his backing, while Coinbase Chief Policy Officer Faryar Shirzad said the industry had “secured what is important.” The statement suggested that crypto firms did not get everything they wanted, but they preserved enough room for innovation to consider the final language acceptable.
Armstrong also publicly credited Senators Tillis and Alsobrooks, as well as their staffs, for bringing both sides to the table. That detail matters politically. Any bill that needs to clear the Senate with a meaningful margin requires genuine bipartisan negotiation, especially when banking, securities regulation, and digital asset policy all intersect.
The deeper political contest among Coinbase, banks, and Washington
Armstrong’s broader message was that traditional finance is not standing still. He said that in conversations with multiple bank CEOs, many are increasingly treating digital assets as a growth opportunity rather than simply a threat. According to Armstrong, these institutions are integrating stablecoins “as fast as they can.” That observation highlights a crucial reality in the debate: while banks may resist certain crypto business models in public policy fights, many are also preparing for a world in which stablecoins and tokenized payments become mainstream financial infrastructure.
This helps explain why the legislative process has been so difficult. The conflict is not a simple story of banks versus crypto. In practice, many large financial institutions appear willing to adopt digital asset rails, but they want those rails governed by rules that preserve their competitive position. Crypto-native firms, by contrast, want to avoid being pushed entirely into a bank-centric regulatory structure. The result is a sophisticated lobbying battle over who gets to shape the next generation of financial plumbing.
In April, more than 100 crypto firms and industry groups, including the Crypto Council for Innovation and the Blockchain Association, sent a letter to the Senate Banking Committee urging lawmakers to advance the bill. They warned that continued delay could push both innovation and capital outside the United States. That argument has become a recurring theme in U.S. crypto policy: regulatory ambiguity is not neutral, because it can function as a competitive disadvantage when other jurisdictions move faster.
Treasury Secretary Scott Bessent reinforced that view in testimony before a Senate panel, saying the legislation is essential to protecting the dollar’s role as the world’s reserve currency. That statement elevated the conversation beyond industry compliance. Supporters of the bill increasingly frame it as part of a broader strategic effort to maintain U.S. influence over the future of digital finance, dollar-based payment infrastructure, and globally mobile capital.
Seen in that light, the CLARITY Act is no longer just a technical bill about asset classifications or agency jurisdiction. It has become part of a larger national policy argument over whether the United States can remain central to the evolution of on-chain finance.
What obstacles remain after the committee vote
The upcoming Thursday markup is important, but it is far from the finish line. Even if the Senate Banking Committee approves the bill, the legislation must still be reconciled with a version passed by the Senate Agriculture Committee in January 2026 on a narrow 12–11 party-line vote. Because the two committees oversee different regulatory domains, the merger process could materially affect the final balance of SEC authority, CFTC authority, and stablecoin treatment.
The larger hurdle comes on the Senate floor. A full vote requires 60 votes, which means Democratic support is not optional. It is a practical necessity. That is why negotiations are likely to continue even after committee action, particularly among senators focused on financial ethics, conflicts of interest, and executive accountability.
The biggest unresolved fault line is the fight over ethics provisions, especially language concerning President Trump and his family’s crypto holdings. This dispute is more than a side issue. For some lawmakers, it goes to the legitimacy of the entire bill and whether the legislation could be seen as conferring benefits on politically connected actors. If that concern remains unresolved, it could slow the bill, force additional amendments, or complicate coalition-building for final passage.
So while the CLARITY Act is closer than ever to becoming federal law, several gates remain: committee approval, reconciliation with the Agriculture Committee version, a successful 60-vote Senate floor outcome, a workable resolution of ethics concerns, and ultimately a presidential signature. For the crypto market, the significance of this process extends well beyond one piece of legislation. It is a test of whether the United States is finally prepared to build a coherent federal framework for digital assets rather than relying on fragmented enforcement and overlapping agency claims.