The U.S. Senate Banking Committee late on Monday unveiled the text of a long-awaited, landmark bill that would create a regulatory framework for cryptocurrencies ahead of a scheduled committee vote to advance the bill on Thursday. Dubbed the Clarity Act, the bill aims to clarify financial regulators’ jurisdiction over the burgeoning sector, potentially boosting the adoption of digital assets.
Here are five key provisions:
The most contentious provision of the bill deals with how crypto exchanges and other crypto players are allowed to pay rewards on dollar-backed crypto tokens called stablecoins.
The bill bans rewards on idle balances of stablecoins that closely resemble bank deposits, but would allow rewards on transaction-based activity, such as a payment via a stablecoin.
The Securities and Exchange Commission, the Commodity Futures Trading Commission and the Treasury Department would be required to issue joint rules to implement that provision. Banks have pushed back on this provision, saying it could shift deposits away from the regulated banking system. Crypto companies say that prohibiting third parties, such as crypto exchanges, from paying interest on stablecoins would be anti-competitive.
The bill would require all digital commodity exchanges, brokers and dealers to be treated as financial institutions under the Bank Secrecy Act, which would compel them to comply with anti-money- laundering, customer identification and due-diligence requirements. That would put crypto firms largely under the same anti-money-laundering regime as banks, whereas some crypto firms have previously argued that they are not subject to the same rules.
Crypto companies would be allowed to raise up to $50 million a year, and up to $200 million in total, without having to register with the SEC, as other companies do when fundraising.
Crypto tokens tied to investment contracts could still be sold under this regime, but with a reduced regulatory burden compared with how securities are treated. This exemption would limit the SEC’s ability to argue that most token sales are illegal securities offerings, a stance taken by the regulator under former U.S. President Joe Biden’s administration and which many courts have also backed.
Many popular crypto platforms are “decentralized,” meaning that users interact directly with one another, in contrast to traditional exchanges, for example, which sit in between trades.
Decentralised platforms have argued that they are unable to comply with bank-like rules because those rules mostly assume there is a legal entity that sits in the middle of transactions and which holds customer funds.
The Clarity Act would define when a platform is sufficiently decentralised. If it does not meet the bar, it would be treated as a financial institution and would be required to report suspicious activity and monitor transactions, similar to banks.
Platforms would not be considered “decentralized” if they have the ability to block users, or if they have private permissions or hard-coded special privileges that other users do not have.
Tokenisation generally refers to the process of turning financial assets, such as stocks, bonds and even real estate, into crypto assets. Crypto companies have been investing in tokenised stock trading ahead of expected moves by the SEC to allow companies to experiment with blockchain-based stock trading.
The bill would clarify that putting securities on the blockchain does not exempt them from securities laws. It also requires the SEC to further study the regulatory treatment of tokenised securities.
The bill would also mandate that, for regulatory purposes, tokenised securities generally be treated in the same way as the underlying securities they represent.
Published – May 13, 2026 09:28 am IST
