Senate Banking Committee Unveils 309-Page Crypto Market Structure Bill Before Thursday Markup

Bitcoin Magazine

Senate Banking Committee Unveils 309-Page Crypto Market Structure Bill Before Thursday Markup

The U.S. Senate Banking Committee released the full text of the Digital Asset Market Clarity Act just after midnight Monday, placing the 309-page manager’s amendment in public view 48 hours before the panel’s scheduled Senate markup on Thursday, May 14.

Chairman Tim Scott (R-SC), Subcommittee on Digital Assets Chair Cynthia Lummis (R-WY), and Senator Thom Tillis (R-NC) issued the bill text 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,” Scott said. “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.” 

Lummis described the text as the product of “nearly a year of bipartisan, blood, sweat, and tears.”

The stablecoin yield deal

The legislation’s most contested provision — Section 404, which governs stablecoin yield — reached its current form through three stages of negotiation. On May 1, the compromise text became public. On May 4, Senators Tillis and Angela Alsobrooks (D-MD) issued a joint statement declaring the deal final, saying they “respectfully agree to disagree” with continued banking industry pressure. 

The final language bars 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. Activity-based rewards — cashback on payments, transaction-based incentives, and rewards tied to commerce — remain permitted. Holding a stablecoin with no activity generates no return.

Coinbase CEO Brian Armstrong held a live event on X on Monday in which he said, “Not everyone got everything they wanted, but they got the must-haves.” Armstrong added that Coinbase is working with at least five of the largest global banks and wants integration to be “win-win.” The SEC, CFTC, and Treasury Department will have twelve months after enactment to write the joint implementing rules.

Banking groups push back

The banking industry has not stood down. 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 engagement to block the stablecoin provisions. 

Their core argument: yield-bearing stablecoins function as substitutes for insured deposits and threaten bank funding for mortgages and lending.

The industry front shows fractures, however. Reports indicate that large banks with consumer-facing arms oppose the language, while banks without them are more receptive, and some community banks have signaled quiet support. 

Coinbase Chief Policy Officer Faryar Shirzad called the deposit-flight argument “a fabrication and wildly overstated,” and noted that fully reserved stablecoins are not the same as fractionally-reserved bank deposits.

Senator Bernie Moreno (R-OH) called the ABA’s mobilization the “banking cartel in full panic mode” on X and confirmed his vote in favor during the upcoming Senate markup.

Galaxy Digital research published last week contended that stablecoin growth would pull trillions in foreign capital into U.S. banking infrastructure at a rate that “materially exceeds any domestic deposit migration.”

DeFi protections hold

On the DeFi front, the bill retains language drawn from the Blockchain Regulatory Certainty Act, which shields software developers who do not control customer funds from treatment as money transmitters. 

The DeFi Education Fund said in a statement that “the most important provisions for developers and infrastructure providers — the BRCA and protections under the Exchange Act — are in this bill,” and that the group would monitor amendments this week. A separate accord among Senate lawmakers, reported Monday by Punchbowl News, adds allowances for prosecutors to pursue crypto money-laundering cases within the Clarity Act framework.

A Senate ethics stalemate

The bill’s biggest remaining fault line is ethics. Senator Elizabeth Warren, Ranking Member of the Senate Banking Committee, released a statement condemning the newly unveiled crypto market structure bill text as a threat to investors, national security, and the financial system. 

She called out the bill for containing zero ethics provisions to address President Trump and his family’s $1.4 billion in crypto gains, demanding no committee member support legislation that fails to curb those conflicts of interest.

Democrats have drawn a firm line: Senator Kirsten Gillibrand said at Consensus Miami that there would be “no one voting for this bill” without an ethics provision barring members of Congress, senior administration officials, and the president from profiting through insider status in the crypto industry. 

White House crypto adviser Patrick Witt countered that the administration accepts ethics rules applying “across the board, from the president all the way down to the brand new intern on Capitol Hill,” but rejects anything targeting a specific officeholder or family.

The Thursday Senate markup is not the finish line. If the Banking Committee approves the bill, it must then merge with a version passed by the Senate Agriculture Committee, which holds jurisdiction over digital commodities. A Senate floor vote requires 60 votes — a threshold that makes Democratic support necessary and makes the ethics provision a practical prerequisite for passage. 

The White House is targeting a July 4 signing as a 250th-anniversary milestone.

This post Senate Banking Committee Unveils 309-Page Crypto Market Structure Bill Before Thursday Markup first appeared on Bitcoin Magazine and is written by Micah Zimmerman.