TL;DR
- Negotiations on the CLARITY Act in the U.S. Senate are in a critical phase, but no official date has been set for a vote in the Banking Committee
- The banking industry warns that interest on stablecoins could threaten up to $6.6 trillion in bank deposits
- The law will allocate supervisory responsibility between the SEC and CFTC, providing the crypto industry with much-needed regulatory clarity
- Disagreement over stablecoin interest rates is the main bottleneck in the Senate as of March 2026
The Crypto Law That Could Change Everything
One of the most discussed laws in American crypto history is still in limbo. The CLARITY Act — formally known as the Digital Asset Market Clarity Act — passed the House of Representatives in July 2025 with solid bipartisan support but has since been stalled in the Senate. This week, according to Bitcoinist, key meetings are being held that could determine whether the bill can finally move forward.
The bill was introduced by Representative French Hill (R-AR) in May 2025 and received a full 78 Democratic votes when it passed the House of Representatives with 294 to 134 votes. This is not an everyday occurrence in today's polarized Washington.
"If U.S. banks resist these legislative changes, crypto innovation could move to Europe and Asia — leaving U.S. financial institutions behind." — Former CFTC Chairman Christopher Giancarlo
What the Law Actually Proposes
At the core of the CLARITY Act is a clear division of labor between the two most important financial regulators in the U.S.: the SEC (Securities and Exchange Commission) and the CFTC (Commodity Futures Trading Commission). Today, authorities largely operate with what critics call "regulation by enforcement," without a clear legal framework defining who is responsible for what.
The law divides digital assets into three categories:
Digital Commodities (CFTC Jurisdiction): Cryptocurrencies that are sufficiently decentralized — including Bitcoin and Ethereum — will be classified as commodities and regulated by the CFTC. Exchanges and brokers handling such assets must register with the CFTC.
Investment Contract Assets (SEC Jurisdiction): Tokens sold for capital raising in, for example, ICOs are treated as securities and remain under the SEC. However, if a token over time becomes sufficiently decentralized and is traded in the secondary market, it can "mature" into the commodity category and shift to CFTC oversight.
Stablecoins (Special Regulation): Stablecoins are handled under a separate, tailored supervisory model. Trading activity falls under the CFTC, while the issuers themselves are regulated through a separate law — the GENIUS Act — which was already signed in July 2025.
Banks Sound Alarm Over Stablecoin Interest Rates
The main reason the bill remains stalled in the Senate is not about Bitcoin or Ethereum — it's about stablecoins and interest rates. The banking industry has heavily mobilized against a point in the bill that could allow stablecoin issuers to offer returns to their users.
According to research related to the legislative process, banks fear that interest-bearing stablecoins could draw enormous sums out of traditional bank deposits. The figure mentioned is staggering: up to $6.6 trillion in deposits are reportedly at risk. If money flows out of banks and into stablecoins with returns, it would also weaken banks' ability to grant loans — a classic source of bank earnings.
Critics of the bill also point out that there are questions about the CFTC's capacity to take on the expanded supervisory responsibility. The agency has historically focused on derivatives markets, not spot trading, and former CFTC regulators believe the agency will need both new legal authority and significantly increased budgets to fulfill its new role.
SEC and CFTC Signal Cooperation
Although the bill is stalled in the Senate, regulators have not been idle. As recently as March 17, 2026, the SEC issued a joint interpretation with the CFTC on how current securities legislation applies to crypto assets. This is interpreted by industry observers as a signal that the two agencies are moving towards a more coordinated approach — regardless of whether the CLARITY Act passes.
This represents a significant change in course from a period when the SEC, under previous leadership, largely operated without coordinating with the CFTC in the crypto space.
What Happens Next?
The meetings in the Senate this week — which Bitcoinist describes as crucial — could indicate whether there is political will to resolve the remaining points of conflict. A date has not yet been set for a formal markup phase in the Senate Banking Committee, which is the next step before a potential Senate vote.
For the crypto industry, this is about more than just law. After years of uncertainty surrounding the regulatory status of most tokens, a passed CLARITY Act would provide a legal framework that could unlock institutional capital and facilitate new products and services.
For banks, the struggle is equally existential, just in the opposite direction.
