Editor’s Note: U.S. cryptocurrency regulation is once again entering a critical window. On May 14, the U.S. Senate Banking Committee will consider the CLARITY Act—a long-awaited piece of legislation championed by the crypto industry—that aims to establish a clearer regulatory framework for the U.S. digital assets market. Its core significance lies not merely in “good news for the crypto industry,” but in the U.S. government’s attempt to bring longstanding regulatory disputes back into the congressional legislative process.
Specifically, the CLARITY Act addresses three main issues.
First, clearly define the regulatory boundaries between the SEC and CFTC regarding digital assets. Over the past several years, crypto companies have long faced ambiguity over regulatory jurisdiction—whether an asset should be regulated by the securities regulator, the SEC, or the commodities regulator, the CFTC, has often depended on enforcement actions and case-by-case determinations. If enacted, this bill would establish clearer jurisdictional boundaries for regulators, reducing the longstanding legal uncertainty faced by the industry.
Second, determine when a token qualifies as a security, commodity, or another category. This is one of the most critical compliance issues in the crypto industry. For project teams, exchanges, and investors, the classification of a token determines obligations related to issuance, trading, disclosure, and regulation. The bill seeks to establish a formalized classification system to provide digital assets with a more stable legal identity and to lay the foundational rules for future product design and market access in the industry.
Third, the stablecoin reward provisions aim to ease tensions between crypto companies and banks over deposit outflows. Under the current compromise, users will not receive rewards similar to interest on idle USD stablecoins, as this is deemed too similar to bank deposits; however, rewards tied to stablecoin use cases such as payments and transfers will still be permitted. In other words, regulators are attempting to distinguish whether stablecoins serve as payment tools or as disguised deposit products.
This is also where the conflict between the banking and crypto industries is most acute. Banks fear that if intermediaries such as trading platforms can pay yields to stablecoin holders, funds may flow out of the insured banking system, eroding traditional banks’ deposit base and posing financial stability risks. Crypto companies argue that prohibiting third parties from offering yields on stablecoins essentially protects the incumbent interests of banks and restricts market competition.
Therefore, the significance of the CLARITY Act extends beyond the cryptocurrency industry itself. It is not only about categorizing tokens and assigning regulatory responsibilities, but also about redefining the financial boundaries between banks, exchanges, stablecoin issuers, and payment platforms: How much can stablecoins resemble bank deposits? How deeply can crypto companies penetrate payment and savings services? And can traditional banks continue to monopolize the right to earn interest on dollar balances?
Next, whether the bill can gain sufficient support from Democratic senators will determine whether U.S. cryptocurrency regulation can move beyond years of stalemate and become a reality. What matters most is not simply whether the CLARITY Act is “crypto-friendly,” but that the U.S. is now placing stablecoins and digital assets at the core of its financial infrastructure competition. Once regulatory boundaries are established, the future distribution of interests between crypto companies and traditional banks will be rewritten accordingly.
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U.S. senators are expected to review a long-awaited piece of legislation next week. The bill would establish a regulatory framework for cryptocurrencies and has the potential to break the previous deadlock surrounding it—a deadlock that once pitted crypto companies against the U.S. banking sector.
If enacted into law, the CLARITY Act would clarify the jurisdiction of financial regulators over this rapidly growing industry and could further accelerate the adoption of digital assets.
On Friday, Senator Tim Scott, Chairman of the U.S. Senate Banking Committee, stated that the committee will hold an executive meeting at 10:30 a.m. Eastern Time (14:30 GMT) on May 14 in the Dirksen Senate Office Building in Washington, D.C.
The crypto industry has been advocating for this legislation, stating that it is crucial for the future of digital assets in the United States and necessary to address core issues that have long plagued crypto companies. Among other provisions, the bill would define under what circumstances crypto tokens qualify as securities, commodities, or other categories, thereby providing legal clarity for the industry.
The bill also includes a provision aimed at resolving a heated dispute between crypto companies and the banking industry. Under a compromise brokered by Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks, offering rewards to customers for holding dollar-backed stablecoins will be prohibited, as such arrangements are deemed similar to bank deposits.
However, rewards from other activities related to stablecoins, such as payment transfers, will be permitted. Banking trade organizations oppose this arrangement, arguing that it grants cryptocurrency companies too much operational leeway and could lead to deposits flowing out of the regulated banking system.
Before the hearing, the banking industry is making a final push to sway some Republican members of the Senate Banking Committee, but it remains unclear whether they will succeed.
Banking lobbyists have long sought to amend the CLARITY Act to close a "loophole" created by legislation signed into law last year, which allows intermediaries to pay interest on stablecoins. Banks argue that this could lead to deposits flowing out of the insured banking system and potentially threaten financial stability.
Cryptocurrency companies stated that prohibiting cryptocurrency exchanges and other third parties from paying interest on stablecoins would constitute anti-competitive behavior.
The crypto industry hopes the CLARITY Act will be passed within the coming months, before the November midterm elections, when Democrats may regain control of the House of Representatives.
The House passed its version of the CLARITY Act in July last year, but the Senate must pass the bill by the end of 2026 for it to be sent to U.S. President Donald Trump for signature.
Many Democratic members of Congress have opposed the bill, citing insufficient anti-money laundering provisions and the need for stronger measures to prevent political officials from profiting from cryptocurrency projects.
The bill needs the support of at least seven Democrats to pass in the full Senate.
President Trump actively sought funding from the crypto industry and pledged to become an “加密 president.” At the same time, his family’s own crypto ventures have helped push the industry further into the mainstream.