Senate Banking Committee Unveils 309-Page Crypto Market Structure Bill Ahead of Thursday Market
The US Senate Banking Committee released the full text of the Digital Asset Market Clarity Act shortly after midnight on Monday, making the 309-page executive amendment public 48 hours before the Senate committee’s markup on Thursday, May 14.
Chairman Tim Scott (R-SC), Subcommittee on Digital Goods Chair Cynthia Lummis (R-WY), and Senator Thom Tillis (R-NC) released the bill’s text and a section-by-section summary. “This bill reflects the honest, honest work of the entire committee and delivers the certainty, protection and accountability that the American people deserve,” Scott said. “It puts consumers first, fights money laundering, attacks criminals and foreign enemies and preserves the future of finance here in the United States.”
Lummis described the document as the product of “almost a year of bifurcation, blood, sweat, and tears.”
Stablecoin price
The most controversial provision of the law – Section 404, which regulates stablecoin yields – reached its current state through three rounds of negotiations. On May 1, the compromise text became public. On May 4, Senators Tillis and Angela Alsobrooks (D-MD) issued a joint statement announcing the final deal, saying they “respectfully disagree” with the banking industry’s continued pressure.
The language bars stablecoin issuers and associated digital asset service providers from paying yield on stablecoin balances if that yield is equivalent to the performance or economics of bank interest. Performance-based rewards – reimbursement on fees, transaction-based incentives, and trade-related rewards – are always allowed. Holding a stablecoin without a transaction does not return.
Coinbase CEO Brian Armstrong held a live event on X on Monday where he said, “Not everyone got everything they wanted, but they got what they deserved.” Armstrong added that Coinbase works with at least five major banks around the world and wants the merger to be a “win-win.” The SEC, CFTC, and Treasury Department will have twelve months after enactment to draft joint implementing rules.
Banking groups are taking a step back
The banking industry did not stand still. The American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America sent a joint letter over Mother’s Day weekend to bank CEOs, urging congressional action to block stablecoin provisions.
Their main argument: yield-generating stablecoins act as a form of insured deposit and threaten bank financing of mortgages and lending.
The industry front is showing signs of breaking, however. Reports show that major banks with consumer-facing weapons are resisting the language, while banks without them are more receptive, and some community banks have shown quiet support.
Coinbase’s Chief Policy Officer, Faryar Shirzad, called the deposit argument “inventive and overstated,” and noted that fully reserved stablecoins are not the same as partially reserved deposits.
Senator Bernie Moreno (R-OH) called the ABA’s promotion a “bank wagon full of panic” on X and confirmed his vote in favor during the upcoming Senate campaign.
A study by Galaxy Digital published last week argues that the growth of stablecoins will draw billions of foreign capital into the U.S. banking infrastructure at a rate that “exceeds any migration of domestic deposits.”
DeFi protection is catching up
On the DeFi front, the bill retains language taken from the Blockchain Regulatory Certainty Act, which protects software developers who do not control customer funds from being treated as money transmitters.
The DeFi Education Fund said in a statement that “the most important provisions for developers and infrastructure providers – BRCA and protections under the Exchange Act – are in this bill,” and that the group will monitor the amendments this week. A separate agreement between Senate lawmakers, reported Monday by Punchbowl News, adds grants for prosecutors to pursue cryptocurrency-trafficking cases within the framework of the Clarity Act.
Conflict of principles of the Senate
The biggest flaw left in this bill is ethics. Senator Elizabeth Warren, a ranking member of the Senate Banking Committee, issued a statement criticizing the text of the newly introduced crypto market structure bill as a threat to investors, national security, and the financial system.
He called out the bill for containing ethics provisions that would charge President Trump and his family with $1.4 billion in crypto profits, not wanting a rule that supports a committee member who fails to curb that conflict of interest.
Democrats drew a strong line: Senator Kirsten Gillibrand said at Consensus Miami that there would be “no one to vote for this bill” without an ethics provision that prevents members of Congress, senior administration officials, and the president from profiting from an insider’s position in the crypto industry.
White House crypto advisor Patrick Witt responded that the administration accepts rules of conduct that apply “to the entire community, from the president to the new student on Capitol Hill,” but rejected anything directed at a specific office holder or family.
The Senate’s marking on Thursday is not the last line. If the Banking Committee approves the bill, it must be combined with a version passed by the Senate Agriculture Committee, which has jurisdiction over digital assets. A vote on the Senate floor requires 60 votes – a threshold that makes democratic support necessary and makes the ethics provision a prerequisite for passage.
The White House views the July 4 signing as a milestone for the 250th anniversary.
