The US Senate Banking Committee is staring down more than 100 proposed amendments to the CLARITY Act ahead of this week's markup vote. Senator Elizabeth Warren alone filed over 40, aiming to tighten conflict-of-interest rules and national security provisions. The sheer volume signals the crypto bill — which sets ground rules for stablecoins, exchange registration, and token issuance — won't sail through without a fight.
The amendment avalanche
Most of the amendments came in late Thursday. Senator Jack Reed proposed one that would prohibit crypto from being used as legal tender for things like tax payments. That directly undercuts Representative Warren Davidson's 2023 bill that would let the IRS accept Bitcoin. Reed's co-sponsor, Senator Tina Smith, joined him on a separate amendment targeting crypto rewards that are 'substantially similar' to bank deposit interest. The American Bankers Association rallied its members, sending over 8,000 letters in support.
Stablecoin rewards and the bank lobby
The CLARITY Act already bans rewards on idle stablecoin balances but permits transaction-based rewards. The Reed-Smith amendment goes further, effectively shutting down yield-bearing stablecoin products unless they mimic bank accounts — and banks don't offer crypto yields. The SEC, CFTC, and Treasury would have to jointly write rules on what qualifies, a process that could take years. Crypto firms aren't happy, but the banking lobby clearly has momentum.
Legal tender clash
The legal tender amendment is the sharpest ideological split in the bill. Reed's language bars states from recognizing crypto as money for taxes or debts. That would kill efforts in Colorado and Utah to accept Bitcoin for state payments. Davidson's earlier bill shows the House has a completely different view. If this amendment sticks, the final legislation could look very different from what the House passes — assuming it gets that far.
Warren's warning
Warren, never a fan of crypto deregulation, said the bill risks 'turbocharging' crypto-related corruption. Her 40 amendments focus on conflict-of-interest disclosures for regulators and tougher penalties for exchanges that flout AML rules. Under the current text, digital commodity exchanges and brokers would be classified as financial institutions under the Bank Secrecy Act — meaning mandatory customer due diligence. Warren wants that language strengthened, not just mentioned.
The markup is expected to start Monday morning. With 100 amendments, it could run two days or more. The biggest question: will Reed's legal tender ban survive floor debate, or is it a poison pill designed to force a rewrite?
