Senate Panel Advances CLARITY Act After Contentious Markup

The Senate Banking Committee voted 15-9 on May 14 to advance the CLARITY Act after a full day of debate and amendment votes in the Dirksen Senate Office Building. The measure now moves to the Senate floor for further consideration.

Committee Chairman Tim Scott opened the markup by describing the bill as an update to what he called “outdated rules” and said it would strengthen anti-money-laundering and sanctions authorities. Scott framed the legislation as a way to protect national security and expand access to financial innovation.

Ranking Member Elizabeth Warren criticized the bill as written to benefit industry interests rather than consumers. She faulted the committee for focusing on the legislation while families face rising grocery, health care and utility costs and cited a survey indicating cryptocurrency ranks low on voter concern. Warren declared that elected officials should not personally profit from crypto while regulating it.

The committee moved to the markup phase with repeated disputes over procedure. Scott ruled several Democratic amendments out of order, prompting complaints from the minority that the usual deliberative process was constrained. A series of Democratic amendments were put to roll-call votes and failed mostly on 11-13 party-line tallies.

One defeated amendment sought to tighten Treasury sanctions authority and close what supporters called a tokenization loophole to address DeFi platforms such as Tornado Cash. Another proposed requiring publication of bank records tied to suspicions around Jeffrey Epstein and associates; senators debated its relevance to crypto market structure before it failed. Additional amendments aimed to narrow liability protections for DeFi developers and to limit access to certain crypto assets in retirement accounts; each was rejected by the committee.

Banking groups raised a separate concern after the markup, warning that the bill’s current draft could allow interest-like yields on stablecoins that would draw deposits away from traditional and community banks. The American Bankers Association and the Bank Policy Institute issued a joint statement saying the draft lacks safeguards against deposit outflows and could threaten local lending. Senators Jack Reed and Tina Smith tried to offer an amendment to restrict such yields, but Chairman Scott declined to call the provision for a vote.

Republicans obtained two Democratic votes to carry the bill out of committee. Senators Ruben Gallego and Angela Alsobrooks joined all 13 Republican members in approving the measure. Gallego said his vote was intended to keep negotiations moving and reserved the right to change his stance on the Senate floor if ethics provisions related to the President’s crypto holdings were not strengthened.

Senator Cynthia Lummis defended the bill’s potential to expand financial access, arguing digital assets can provide a way for people fleeing abusive situations or repressive regimes to carry savings via memorized seed phrases. Senator Mark Warner, who worked on parts of the draft and described recent months as “crypto hell,” declined to support advancing the bill from the committee.

With the 15-9 committee vote, the CLARITY Act advances to the full Senate, where senators will continue debating its ethics provisions, consumer protections and the banking sector’s concerns about stablecoin yields. Floor action will determine whether the measure can secure the votes needed to overcome procedural hurdles in the full Senate.