The Senate Banking Committee released the Clarity Act draft, setting up a Thursday markup. Bitcoin surged as the draft included a bipartisan stablecoin yield compromise.
The U.S. Senate Banking Committee released the full legislative text of the crypto market structure bill on Tuesday, setting the base for a committee markup on Thursday. Bitcoin and the broader crypto market rallied immediately on the news.
The draft, released by Chairman Tim Scott, Digital Assets Subcommittee Chair Cynthia Lummis, and Senator Thom Tillis, will serve as the base text for the Clarity Act markup. Committee members now have a day to file final amendments before the Thursday session.
The release caps nearly a year of negotiations with Democrats, regulators, law enforcement, financial institutions, and consumer advocates. It builds on principles published in June of last year and discussion drafts circulated in July and September.
The base text provides the first complete look at how the Senate would regulate digital asset markets. The markup, scheduled for Thursday, May 14, is the next concrete decision point. Committee members have until Wednesday to submit amendments. Any amendment adopted during the markup could reshape the bill’s impact on exchanges, stablecoin issuers, and DeFi protocols.
The Clarity Act aims to define which digital assets are securities, which are commodities, and how each category is regulated. It also sets rules for stablecoin issuance, custody, and anti-money laundering compliance. The draft released Tuesday includes a bipartisan compromise on stablecoin yields that Senator Tillis described as the product of months of negotiations between banks and crypto representatives. The negotiation process drew input from the SEC, CFTC, Treasury, and law enforcement agencies, reflecting an effort to create a unified federal framework.
The markup is the last chance for senators to insert provisions before the bill moves to the full Senate. The base text already reflects extensive bipartisan input. Any last-minute change that disrupts that balance could delay the bill or alter market expectations. A clean markup with only technical amendments would signal that the bipartisan coalition holds, keeping the July 4 signing target within reach.
The most consequential detail in the draft is the stablecoin yield provision. Senator Tillis said the updated language is a bipartisan compromise that provides regulatory certainty after months of negotiations. The exact mechanics of the compromise are not yet public. The existence of a deal removes a major sticking point that had threatened to derail the bill.
Stablecoin yield is the interest paid to holders of dollar-pegged tokens. A ban on yield, as proposed in earlier Senate drafts, would have made it harder for stablecoin issuers to attract deposits and for DeFi protocols to offer competitive rates. A compromise that permits some form of yield, perhaps with bank-like safeguards, would preserve a key feature of the current crypto ecosystem. The market’s positive reaction Tuesday suggests traders are pricing in a workable outcome.
Key insight: The stablecoin yield compromise removes a major sticking point that had threatened to derail the bill, clearing a path for broader market structure rules.
Decentralized lending platforms rely on stablecoin yields to attract liquidity. A ban would have forced protocols to restructure their interest rate models, potentially driving activity offshore. The compromise, by preserving yield in some form, keeps DeFi lending viable under U.S. regulation. That outcome supports tokens tied to lending protocols and decentralized exchanges.
A federal market structure bill would give crypto exchanges a clear regulatory framework for the first time. Currently, exchanges operate under a patchwork of state money-transmitter licenses and uncertain federal guidance. The Clarity Act would define registration requirements, custody rules, and trading standards. That clarity would reduce legal risk for platforms and could accelerate institutional adoption.
Coinbase Global (COIN), with an Alpha Score of 36/100 (Mixed), is among the publicly traded names most directly exposed to U.S. crypto regulatory outcomes. A clear market structure bill would lower the regulatory overhang that has weighed on the stock. The company has invested heavily in compliance and has publicly supported the Clarity Act. If the markup produces a bill that passes the Senate, COIN could reprice as the market discounts a more predictable operating environment. COIN stock page
Clear custody rules would also make it easier for banks and traditional custodians to hold digital assets. That would open the door to larger institutional flows into Bitcoin and Ethereum. The bill’s treatment of custody is therefore a key variable for the next leg of institutional adoption. For retail traders, a clear regulatory framework would also benefit crypto brokers, making it easier to offer compliant services. See our list of best crypto brokers.
Senator Lummis noted that President Trump plans to sign the bill into law on July 4. That target sets an ambitious timeline. After the committee markup, the bill must pass the full Senate, then the House, and then be signed. Any delay at the markup stage would compress the remaining window.
Risk to watch: Any amendment that reintroduces a stablecoin yield ban would reverse the market's constructive read and hit DeFi tokens hardest.
The immediate rally in Bitcoin and crypto prices reflects the market’s view that the Clarity Act is net positive. The assets most sensitive to the bill’s progress fall into three categories.
Bitcoin and Ethereum are the primary beneficiaries of regulatory clarity. Both are already classified as commodities by the CFTC. A statutory definition would remove any residual uncertainty. That would make it easier for ETFs, pension funds, and corporate treasuries to allocate. Bitcoin (BTC) profile Ethereum (ETH) profile
Tokens tied to exchanges and DeFi protocols would also reprice. A clear market structure bill would reduce the risk of enforcement actions against platforms. Tokens like Uniswap’s UNI or Aave’s AAVE, which have faced regulatory uncertainty, could benefit.
The stablecoin yield compromise directly affects issuers like Circle (USDC) and Tether (USDT). A framework that permits yield would strengthen their business models. A ban would force them to restructure.
The market is pricing a smooth markup and eventual passage. The next 48 hours will test that assumption.
For traders, the Clarity Act markup is a binary event with a clear catalyst. The base text is constructive. The risk is that amendments introduce new restrictions. The July 4 signing target adds a time element. Positions that benefit from regulatory clarity–long Bitcoin, long COIN, long exchange tokens–carry event risk through Thursday. Hedging that risk with options or reducing size ahead of the markup is a standard play. The rally on Tuesday suggests the market is leaning bullish. The markup itself is the moment when that thesis gets tested.
Related: Crypto Clarity Bill Text Tuesday Sets Up Key Senate Vote Wednesday
Drafted by the AlphaScala research model and grounded in primary market data – live prices, fundamentals, SEC filings, hedge-fund holdings, and insider activity. Each story is checked against AlphaScala publishing rules before release. Educational coverage, not personalized advice.