Senate Banking Committee Introduces Major Crypto Regulation Bill Ahead of Markup Vote

Senate Banking Committee Releases 309-Page Crypto Regulation Bill

The U.S. Senate Banking Committee published the full text of the Digital Asset Market Clarity Act just after midnight on Monday, making the 309-page manager’s amendment publicly available 48 hours before the scheduled Senate markup on Thursday, May 14.

The bill text was issued by Chairman Tim Scott (R-SC), Subcommittee on Digital Assets Chair Cynthia Lummis (R-WY), and Senator Thom Tillis (R-NC), alongside a section-by-section summary.

“This bill reflects serious, good-faith work across the committee and delivers the certainty, safeguards, and accountability Americans deserve. It puts consumers first, combats illicit finance, cracks down on criminals and foreign adversaries, and keeps the future of finance here in the United States.”

“This text is the product of nearly a year of bipartisan, blood, sweat, and tears.”

The Stablecoin Yield Compromise

The legislation’s most contested provision, Section 404, governs stablecoin yield and was finalized after three stages of negotiation:

• May 1: The compromise text was made public.
• May 4: Senators Tillis (R-NC) and Angela Alsobrooks (D-MD) issued a joint statement declaring the deal final, stating they “respectfully agree to disagree” with continued banking industry pressure.

The final language prohibits stablecoin issuers and affiliated digital asset service providers from paying yield on stablecoin balances if that yield is the functional or economic equivalent of bank interest. However, activity-based rewards—such as cashback on payments, transaction-based incentives, and rewards tied to commerce—remain permitted. Stablecoins held without activity generate no return.

“Not everyone got everything they wanted, but they got the must-haves.”

“We’re working with at least five of the largest global banks and want integration to be a win-win.”

Following enactment, the SEC, CFTC, and Treasury Department will have twelve months to draft joint implementing rules.

Banking Industry Opposition and Internal Divisions

The banking industry has strongly opposed the stablecoin provisions. The American Bankers Association (ABA), Bank Policy Institute (BPI), and Independent Community Bankers of America (ICBA) sent a joint letter over Mother’s Day weekend urging bank CEOs to engage Congress to block the provisions.

Their primary argument: yield-bearing stablecoins function as substitutes for insured deposits, potentially threatening bank funding for mortgages and lending.

However, the industry shows signs of division. Reports indicate that large banks with consumer-facing arms oppose the language, while banks without them are more receptive. Some community banks have also signaled quiet support.

“The deposit-flight argument is a fabrication and wildly overstated. Fully reserved stablecoins are not the same as fractionally-reserved bank deposits.”

“The ABA’s mobilization is the banking cartel in full panic mode.”

Senator Moreno confirmed his vote in favor of the bill during the upcoming Senate markup.

Potential Economic Impact of Stablecoin Growth

A recent report by Galaxy Digital argued that stablecoin growth could attract trillions in foreign capital into U.S. banking infrastructure at an accelerated rate.