The Senate Committee overheard the Clarity Bill, and the market has begun to make a difference

Original Odaily Daily Planet (@OdailyChina)

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On May 14th, the United States Senate Banking Commission voted 15 to 9The Digital Asset Market Clarity Bill (Digital Assembly Market Clarity Act, known as the CLARITY Act) was passed before the Committee to move it to the Senate plenary voting stage。

The results were essentially along party lines: all Republican members voted for it, but at the same time two Democrat senators broke down their party positions and voted in favour: Ruben Gallego from Arizona and Angela Alsobrooks from Maryland。

It is worth noting that the latter stated after the vote that today's affirmative vote was a "vote to continue to work in good faith" and made it clear that she would not support the bill in a full Senate vote until a number of core issues were resolved。

At the end of the hearing, the chairman of the Commission, Republican Senator Tim Scott, obtained this cross-party vote through a procedural exercise. The hearing lasted several hours, during which the two parties engaged in a heated exchange of amendments, several of which were rejected or blocked procedurally。

WHAT'S THE CLARITY BILL? PEOPLE CAN READ THE EDITION:

IN SHORT, THE CIA ACT ATTEMPTS TO ANSWER A CENTRAL QUESTION THAT HAS PLAGUED THE UNITED STATES ENCRYPTION INDUSTRY FOR MANY YEARS:Who will regulate digital assets such as bitcoin, Ethera

AT PRESENT, THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (SEC) AND THE COMMODITY FUTURES AND EXCHANGE COMMISSION (CFTC) HAVE LONG BEEN ENGAGED IN BORDER BLURRING AND COMPETITION OVER THE RIGHT TO REGULATE ENCRYPTED ASSETS. THIS UNCERTAINTY LEAVES BUSINESSES DISSATISFIED AND INVESTORS UNPROTECTED。

THE CORE LOGIC OF THE CLARTY ACT IS TO ESTABLISH A CLEAR FEDERAL REGULATORY FRAMEWORK BY CLEARLY CLASSIFYING DIGITAL ASSETS AS “SECURITIES” OR “COMMODITIES” UNDER THE PURVIEW OF THE SEC AND THE CTC RESPECTIVELY. THIS WAS THE FIRST COMPREHENSIVE LEGISLATIVE ATTEMPT IN THE HISTORY OF THE UNITED STATES TO ADDRESS THE ENCRYPTION INDUSTRY, ON 309 PAGES。

In addition, the bill addresses several important issues:

• Stable currency gains rules:In the past, some platforms allowed users to receive interest on similar bank deposits on the sole possession of a stable currency, which triggered a strong rebound in traditional banking. The most recent version of the Act deals with the prohibition of the payment of interest on a "sliding-in" stable currency, but without restriction if the user produces the proceeds through proactive acts such as transactions, transfers, pledges, etc. The logic of this distinction is that the former directly competes with bank deposits, while the latter are a legitimate return on the active participation of users in the market。
• Regulatory standards for the DeFi platform:Due to the absence of the traditional "company" and "managers" of DeFi, it has been difficult for regulators to find enforcement targets in the long term. The CLARITY Act seeks to establish rules for this purpose: it requires the relevant platform to comply with its anti-money laundering obligations, monitor suspicious transactions, conduct user identification checks and comply with the United States Treasury Office of Overseas Assets Control (OFAC) sanctions regulations。
• Legal protection of software developers:This provision addresses a real dilemma: in the past, developers have been held accountable by regulators for having prepared a code for an open-source agreement only after it had been used by outlaws. The Act specifies that if a bad person uses an agreement to engage in illegal activities, legal liability should not be automatically attributed to the software developer of the agreement itself, provided that the developer is not personally involved in the offence. This protection is seen within industry as an important provision to encourage compliance innovation and to prevent "competent law enforcement"。

What are the differences between traditional banking and encryption

This is one of the core contradictions that have been on hold in the last few months。

The banking sector is concerned that:If a stable currency allows interest to be paid to holders like savings accounts, it directly competes with bank deposits, leading to large outflows of funds and weakening the ability of banks to lend to the real economy. Six major banking groups, such as the American Bankers Association, issued a joint statement explicitly calling for tightening restrictions on the return of stable currency。

For its part, the encryption industry believes that excessive restrictions on stable currency gains will stifle innovation and leave the United States behind in global digital finance competition。

The final compromise is:The latest version of the Act (11 May draft) prohibits the “passive holding” of the proceeds of interest on similar deposits, but allows for the generation of proceeds in active acts such as transactions, transfers, pledges, etc。This distinction was seen as a compromise to balance the interests of both sides, but the banking sector indicated that it would continue to push for further tightening。

Where will it follow

Through the Commission ' s deliberations, this is only one point of legislative change, and there are still a few points before formalization:

First level: consolidation of the Committee version。The Senate Committee on Banking and the Senate Committee on Agriculture each have a draft version, which will need to be merged into a single text。

Second: The Senate voted in plenary。The consolidated bill is to be passed by a simple majority of 60 votes in the Senate plenary vote (the motion to close the debate). This means that the Republicans must enlist the support of at least nine Democrat senators, the core of which is the two outstanding issues of ethics and law enforcement。

Third level: Coordination between the Senate and the Senate。The House of Representatives had adopted its own version as early as July 2025, with 294 to 134 votes, but in contrast to the Senate version. The two houses are required to form a unified text, which will then be adopted by separate votes of the two chambers。

Fourth: Signed by the President。Trump is generally expected to sign the bill. The White House consultant Patrick Witt had publicly stated that it was expected that the signing would be completed around Independence Day on 4 July, but the timeline was extremely tight。

The goal of the encryption industry is to complete the entire legislative process before the mid-November elections, otherwise Congress will turn its attention to the campaign and the legislative window may close。

Two core suspenses

1. Ethical provisions for government officials

The bill contains provisions restricting the possession of, or benefit from, encrypted assets by government officials, implicitly referring to Trump himself, who held and promoted several encryption projects during his tenure. The Democratic Party sees this as a necessary precondition for supporting the bill, while the Republicans are obscurantist. Cody Carbone, head of the Digital Chamber of Commerce, stated that the deal was likely to be completed before the bill was voted in the Senate。

2. Law enforcement and countering money-laundering

Democrats, such as Senator Elizabeth Warren, insisted that the bill did not adequately combat the illegal financial activities involved in the DeFi platform. The amendment was rejected by 11 to 13 votes in the Committee today, and the issue will continue to be the focus of negotiations。

Market responses

Once the bill was published, there was a clear rebound in the encryption market。Coinbase (COIN) rose by over 10 per cent and Bitcoin (BTC) by about 2.4 per cent that day。

Industry agencies generally responded positively. Ripple CEO Brad Garlinghouse says: “If the world's largest economy is to lead in encryption — it must be so — this is the moment.” Circle's Chief Strategic Officer & nbsp; Dante Disparte ‌ called the vote “a meaningful cross-party move towards comprehensive digital asset regulation”。

FOR THE WHOLE ENCRYPTION INDUSTRY, THE CLARITY ACT HAS NO LESS MEANING THAN A "LEGITIMATE CORONATION". OVER THE YEARS, THE UNITED STATES REGULATORY BODIES ' VAGUENESS OF THE CHARACTERIZATION OF ENCRYPTED ASSETS AND THEIR INCONSISTENT ENFORCEMENT HAVE KEPT LARGE AMOUNTS OF INSTITUTIONAL FUNDS ON THE HORIZON. ONCE THE BILL IS OVER, THE REGULATORY BOUNDARIES BETWEEN THE SEC AND THE CTC ARE CLEAR AND COMPLIANCE COSTS CAN BE EXPECTED AND THE BIGGEST BARRIERS TO INSTITUTIONAL ENTRY WILL BE REMOVED。

This is also a clear statement in the U.S.’s global digital asset regulation competition - – The European Union adopted the MiCA regulation in 2023, and regulatory frameworks have been set up in Hong Kong, Singapore, Dubai, etc. The long-standing deficit in the United States is being exploited by competitors。

Of course, the bill still has a long way to go. Today's voting in the Committee is an important start。