The Senate Banking Committee released updated text of the CLARITY Act on May 12, setting up a scheduled markup May 14. The latest version of the comprehensive digital asset bill would ban US customers from earning passive interest on payment stablecoins, clarify that non-custodial developers aren't money transmitters, and expand what banks can do with crypto — but unresolved Democratic concerns over ethics restrictions leave the bill's path uncertain.
Stablecoin yield ban stays in
Section 404 of the bill prohibits covered digital asset service providers and affiliates from paying US customers passive interest or yield on payment stablecoin balances. Banking groups had argued such rewards could accelerate deposit flight; crypto firms countered that activity-based rewards tied to transactions, payments, platform use, staking, governance, or loyalty activity are not equivalent to bank interest. The bill leaves room for those rewards, subject to future SEC, CFTC, and Treasury rules.
DeFi carve-outs and developer protections
The Blockchain Regulatory Certainty Act language clarifies that non-custodial blockchain developers and service providers are not money transmitters simply for building software or supporting decentralized networks. Criminal liability remains for anyone who intentionally transfers funds for another person while knowing the assets stem from unlawful activity. The DeFi provisions specify that routine governance actions, infrastructure participation, and limited cybersecurity emergency measures do not automatically establish centralized control — a key concern for protocols wary of being classified as exchanges.
The bill also directs regulators to develop rules for non-decentralized finance trading protocols, requires risk-management programs for intermediaries routing activity through DeFi protocols, and instructs Treasury to provide guidance for certain web-hosted front ends.
Banks get broader authority
Section 401 clarifies that national banks and state banks have a broader statutory basis for digital asset activity. That language, long sought by banking industry groups, could open the door for more traditional financial institutions to offer crypto custody, trading, and even lending services under existing federal charters.
Ethics fight unresolved
Democratic concerns over ethics restrictions for federal officials were not resolved in the released text. That omission could complicate committee passage and floor debate. Senator Thom Tillis voiced support for the updated bill as a bipartisan compromise providing regulatory certainty, but the ethics gap remains a sticking point.
Some US lawmakers believe the legislation could reach President Donald Trump's desk before July 4. The May 14 markup will be the first real test of whether that timeline holds — and whether the ethics dispute gets patched before then.
