- A full Senate floor vote on the CLARITY Act is now expected to take place within the next 30 days.
- Last week, the Senate Banking Committee approved the CLARITY Act in the markup session with a bipartisan 15-9 vote.
- The bill is expected to bring major regulatory clarity for the digital asset sector by splitting oversight between the SEC and CFTC.
After getting approval from the Senate Banking Committee last week with a 15-9 in the bipartisan vote, the Digital Asset Market Clarity Act is now moving forward to get inch closer towards final approval. According to the latest report, the recent approval in the markup session has opened the door for the full Senate floor.
According to online buzz, the floor vote for the CLARITY Act is expected to take place in the next 30 days.
In the last few days, the legislative process for a clear regulatory framework for the crypto market has overcome major hurdles after a major delay and tussles between the banking sector and the crypto industry.
CLARITY Act to Bring Clarity to Digital Asset Sector
In simple words, the CLARITY Act is expected to form clear rules for digital assets such as cryptocurrencies. It will divide regulatory oversight between the two biggest agencies in the U.S., which are the SEC and the CFTC.
The Securities and Exchange Commission (SEC) will handle cryptocurrencies that fall under the security category. The Commodity Futures Trading Commission (CFTC) will look over mature digital assets like Bitcoin that work like commodities on decentralized blockchains, similar to gold or oil.
The bill will create a safe space for the decentralized finance sector, as this bill is expected to create clear rules for stablecoins, strong anti-money laundering (AML) measures, and many more. Republican senators are saying that the CLARITY Act will boost innovation in the U.S. while protecting consumers.
After the Senate committee approved the bill in the markup session, the crypto sector is now closely watching the developments on the full Senate floor. The Senate is expected to schedule a vote within the upcoming weeks, most likely in the next 30 days.
If the bill passes the Senate, it might be reconciled with the version approved by the House before moving forward and reaching the President’s desk.
However, this regulatory framework still needs a lot of work. Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, stated in the recent post on X, “Bipartisan markup of the Clarity Act was a major step forward, but as Senators on both sides of the dais noted, there’s more work to be done before this legislation is ready for prime time. We’ll keep working in good faith to build the support needed to pass the bill on the Senate floor.”
This bill is still facing objections from other lawmakers who are raising questions about issues such as illegal finance and weak consumer protections. In order to clear the Senate floor, the bill is required to get 60 votes to overcome procedural hurdles.
In March, the “21st Century ROAD to Housing Act,” introduced by Senate Banking Committee Chairman Tim Scott, cleared its first step of the process with an impressive 84-6 vote, which includes a ban on CBDC.
CLARITY Act Bill Witnesses Progress After Progress in Stablecoin Yield
Earlier, there was a tussle between the banking sector and the crypto sector over stablecoin yield. In this tussle, regulators were assessing the CLARITY Act and contemplating whether stablecoin issuers and platforms could pay yield to users for simply holding stablecoins. According to banks, these stablecoin yields would steal deposits away from traditional bank accounts. In response, the crypto sector was debating that by putting a ban on the stablecoin yield, banks want to curb innovations.
However, after the intervention of Senators Thom Tillis and Angela Alsobrooks, this issue has been mostly resolved. In the final draft of the CLARITY Act, a ban has been imposed on passive yields. It means that there will be no interest paid on a savings account. However, it will provide activity-based rewards linked to the actual usage, such as transactions, payments, trading, or loyalty programs.
During the January markup session, Coinbase CEO Brian Armstrong withdrew his support for the bill after saying that stablecoin yield restrictions were too harsh. However, Armstrong has publicly raised support for the bill after a “true compromise” where both the crypto and banking sectors decided to agree upon some clauses.
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