The Senate Banking Committee released the full 309-page text of the CLARITY Act just after midnight on Tuesday, May 12, 2026, ahead of a committee markup that could advance the most comprehensive crypto market structure legislation the U.S. has ever attempted.
The bill was released by Chairman Tim Scott, Senator Cynthia Lummis, and Senator Thom Tillis, and reflects months of bipartisan negotiations with lawmakers, regulators, financial institutions, and consumer advocates.
What the bill requires
The headline provision is a 1:1 reserve mandate requiring all payment stablecoin issuers to hold high-quality liquid assets against every token in circulation.
Qualifying reserve assets are restricted to short-duration U.S. Treasuries under 90 days, overnight repurchase agreements, and central bank deposits — a tighter composition requirement than current market practice.
Tether’s USDT reserve disclosures have historically included corporate paper, money market funds, and secured loans, none of which would qualify under this framework.
Circle’s USDC, by contrast, has already shifted toward short-duration Treasuries and cash, positioning it closer to compliance than its largest competitor.
SEC vs. CFTC jurisdiction
The bill draws a hard jurisdictional line between the SEC and CFTC, assigning oversight based on whether a token functions as a security with ongoing management-led profit expectations or as a digital commodity within a decentralized protocol.
That division has been absent from U.S. law since bitcoin’s creation, and its absence has been the single largest barrier to institutional custody approvals at regulated fiduciaries.
Coinbase CEO Brian Armstrong said publicly that:
“Not everyone got everything they wanted, but they got the must-haves.”
Opposition and the path forward
The American Bankers Association escalated its lobbying over the weekend, warning senators that yield-bearing stablecoins could drain insured deposits and destabilize mortgage funding.
Senator Elizabeth Warren argued the bill “stunningly includes zero provisions” to address conflicts of interest, pointing to what she described as $1.4 billion in crypto gains by Trump and his family.
Sixty votes are required for Senate passage, meaning meaningful Democratic support is needed.
Chairman Scott stated the bill “puts consumers first, combats illicit finance, cracks down on criminals and foreign adversaries, and keeps the future of finance here in the United States.”
White House adviser Patrick Witt has set July 4 as the administration’s target for passage, while Senator Kirsten Gillibrand has predicted the first week of August.
