More than 100 amendments have been filed to the Digital Asset Market Clarity Act ahead of next week's Senate Banking Committee markup, turning what was supposed to be a straightforward bill into a legislative knife fight. The House passed the CLARITY Act last July with a solid bipartisan vote of 294-134, but the Senate version is now tangled in fights over ethics, stablecoin yield, and DeFi liability.
The ethics standoff
Democratic Senators Elizabeth Warren, Chris Van Hollen, Angela Alsobrooks, and Raphael Warnock are pushing several ethics amendments. Their proposals would bar public officials—and their families—from profiting on stablecoins or crypto while in office, and would restrict big tech firms from issuing stablecoins. Republican Senators Cynthia Lummis, Bill Hagerty, and Thom Tillis see the move as a deliberate bill-killer. If the ethics language stays in, the bill could exit committee on party lines and face a 60-vote cloture threshold it currently cannot clear.
Stablecoin yield gets awkward
The fight over yield-bearing stablecoins is just as messy. The bill currently bans interest payments on stablecoins, but the key word is solely. Insert it, and yield-bearing products are compliant. Remove it, and they're prohibited. The American Bankers Association sent more than 8,000 letters to Senate offices urging lawmakers to fix the compromise. The banking lobby wants a clean ban; crypto advocates want the loophole left open.
DeFi safe harbor under fire
DeFi protocol liability is another sore spot. The CLARITY Act's jurisdictional architecture gives the CFTC exclusive authority over spot and cash markets for 'digital commodities' on decentralized blockchains, while the SEC keeps oversight over investment contracts and fundraising. But the banking lobby opposes the DeFi safe harbor provisions, arguing they let protocols operate without the compliance infrastructure required of chartered institutions. That argument is gaining traction among committee members worried about regulatory arbitrage.
The Senate Banking Committee markup is set for May 14. If the committee clears the bill with acceptable ethics language, the Senate Agriculture Committee will follow with its own markup. The White House wants a signature by July 4, 2026. That timeline is tight—and if the ethics amendments survive, the whole thing could stall before it even reaches the floor.
