The Senate Banking Committee approved the CLARITY Act on Thursday by a 15-9 vote, marking the first time a wide-ranging piece of crypto legislation has cleared a major Senate panel in the Uni
The Senate Banking Committee approved the CLARITY Act on Thursday by a 15-9 vote, marking the first time a wide-ranging piece of crypto legislation has cleared a major Senate panel in the United States.
Two Democrats, Senators Ruben Gallego of Arizona and Angela Alsobrooks of Maryland, joined all 13 Republican members to push the bill forward. The vote does not make the CLARITY Act law, but it moves the legislation closer than any comparable bill has come before.
The CLARITY Act is a market structure bill. Its central function is to define which digital assets fall under the Securities and Exchange Commission and which fall under the Commodity Futures Trading Commission.
For years, crypto firms operated in a grey area where the SEC applied enforcement actions without a clear statutory framework. The bill resolves that by introducing a decentralization threshold. If a blockchain network meets that threshold, its token shifts from the SEC's securities framework to the CFTC's commodity framework. That distinction matters enormously for projects that have previously faced securities-related enforcement risk.
The House passed its own version of the bill 294-134 in July 2025, granting the CFTC exclusive jurisdiction over spot digital commodity markets while keeping the SEC's authority over investment contract assets.
Thursday's vote was originally scheduled for mid-January but was canceled after a sharp disagreement over stablecoin yield. The sticking point was whether crypto exchanges and other intermediaries should be allowed to offer yield on customers' passive stablecoin holdings.
A compromise, crafted by Senators Tom Tillis and Angela Alsobrooks, eventually broke the deadlock. The new language:
The banking industry pushed back hard. In the days before the vote, more than 8,000 letters were sent to Senate members demanding further changes. Despite that pressure, the stablecoin yield compromise held.
The ethics question proved to be the bigger obstacle. Democratic senators argued the CLARITY Act must include provisions restricting government officials from crypto activity that creates conflicts of interest. This concern is directly linked to President Trump's family involvement in crypto businesses.
Republican members declined to include ethics language in the bill, stating that such provisions sit outside the bill's scope and can be added on the Senate floor. Democrats disagreed. During the session, a Democrat-sponsored ethics amendment introduced by Senator Chris Van Hollen was voted down along party lines.
Senator Mark Warner, who has worked with Republicans on the bill for months, described himself as being in "crypto purgatory," expressing hope that remaining disagreements can still be resolved.
Both Gallego and Alsobrooks, despite voting yes in committee, said their committee votes may not carry over to a full Senate floor vote.
The CLARITY Act must clear several more steps before it reaches President Trump's desk.
The Trump administration has said it wants the bill signed before the August Senate recess, with an informal target of July 4.
The vote triggered a short squeeze in crypto markets within hours. Over $250 million in short positions were liquidated in four hours after the committee result. XRP gained 4.5% to $1.49, extending a 7.6% weekly run. Dogecoin added 3% to $0.1159, BNB gained 2% to $681, and Solana climbed 2% to $91.
The market reaction reflected the bill's SEC-to-CFTC reclassification mechanism. Assets on networks with high decentralization scores had been among the most heavily shorted positions heading into the vote.
The CLARITY Act's 15-9 committee vote is the furthest any broad US crypto market structure bill has progressed through the Senate. The legislation defines SEC and CFTC jurisdiction over digital assets, sets rules on stablecoin yield, and attempts to bring DeFi platforms into a regulatory framework. Significant hurdles remain, including the 60-vote Senate threshold, unresolved ethics provisions, and the need to reconcile differences with the House version. The next few months will determine whether this legislative momentum translates into actual law.
