Key Points
- May 14 markup hearing scheduled by Senate Banking Committee for Digital Asset Market Clarity Act
- January saw the legislation stall when Coinbase withdrew support citing stablecoin yield restrictions and DeFi concerns
- Senators Tillis and Alsobrooks negotiated a stablecoin yield compromise last week
- Trade groups representing banking institutions express reservations about current bill language
- Senator Gillibrand pushes for ethics clause preventing government officials from crypto-related profits
The Digital Asset Market Clarity Act of 2025, commonly referred to as the Clarity Act, will face a critical markup hearing on May 14, as announced by the Senate Banking Committee. The proceedings are scheduled to commence at 10:30 a.m.
Markup hearings represent a pivotal milestone in the legislative process, allowing committee members to review, amend, and vote on proposed legislation before advancing it to the full Senate chamber.
The legislation experienced significant turbulence earlier this year. Coinbase CEO Brian Armstrong publicly withdrew the cryptocurrency exchange’s endorsement in January. Armstrong cited multiple concerns: insufficient legal safeguards for developers working on open source software, prohibitions on stablecoin yield offerings, and regulatory frameworks affecting decentralized finance platforms.
This move created a months-long impasse that halted legislative momentum.
Senators Thom Tillis and Angela Alsobrooks unveiled compromise language last week addressing the contentious stablecoin yield provisions. Under the proposed framework, cryptocurrency platforms would be prohibited from offering yield on passive stablecoin reserves, while still permitting rewards generated through active financial transactions.
The compromise drew positive reactions from Coinbase leadership. Paul Grewal, the company’s chief legal officer, shared his enthusiasm on X with the phrase: “It’s on like Donkey Kong.” Faryar Shirzad, serving as chief policy officer, characterized the development as a “big step forward” and emphasized the legislation’s importance for consumer protection and maintaining America’s position in cryptocurrency innovation.
Senator Cynthia Lummis, recognized for her pro-cryptocurrency stance, expressed support through X: “Let’s pass the Clarity Act out of the Banking Committee on Thursday!”
Trade Organizations Express Reservations
Universal support remains elusive. Multiple banking trade organizations—including the American Bankers Association, the Bank Policy Institute, and the Independent Community Bankers of America—jointly submitted a letter stating that “additional work is needed” regarding the bill’s wording. These groups provided specific proposed amendments to last week’s compromise language.
Nevertheless, the decision to schedule the markup session indicates that Senate leadership intends to proceed with the existing draft.
Ethics Language Debate Continues
Senator Kirsten Gillibrand, known for her consistent support of cryptocurrency innovation, has highlighted an additional concern. She advocates for incorporating ethics language that would prevent senior government officials from financially benefiting from the cryptocurrency sector while simultaneously holding regulatory authority over it.
Research conducted for CoinDesk revealed that 73% of registered American voters favor such restrictions.
Yet this ethics provision may not appear in the Banking Committee’s version. Following the Banking Committee’s markup, reconciliation will be necessary between the Senate Banking Committee’s text and the Senate Agriculture Committee’s version before floor consideration.
Kara Calvert, Coinbase’s vice president of US policy, had forecast the markup timing during remarks at the Consensus 2026 conference recently. She highlighted that passage will require a minimum of 60 votes and bipartisan cooperation.
