The U.S. Senate Banking Committee has approved the Digital Asset Market Structure Bill, also known as the CLARITY Act, during a markup session.
The legislation will be merged with the Senate Agriculture Committee’s version before being presented to the full Senate. However, analysts predict potential hurdles in the integration and presentation process, particularly due to unresolved issues like public official ethics provisions that weren’t thoroughly discussed in the Banking Committee.
On Thursday, the Senate Banking Committee passed the CLARITY Act with a vote of 15 in favor and 9 against during its plenary session.
The CLARITY Act’s primary objective is to categorize virtual assets and delineate the jurisdictions of the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC).
Specifically, the bill classifies virtual assets into three categories: Digital Commodities, Investment Contract Assets, and Payment Stablecoins. The CFTC will oversee Digital Commodities, while the SEC will regulate Investment Contract Assets. This classification aims to prevent the SEC from arbitrarily designating certain virtual assets as securities and imposing regulations as it has done previously.
The legislation also addresses stablecoin-related interest. Under the bill, interest payments for merely holding stablecoins will be restricted. However, rewards for activities utilizing stablecoins, such as payments and transactions, will be permitted.
The bill includes provisions for tokenized assets as well. Securities can now be tokenized within the framework of federal securities laws. While tokenized stocks will still be classified as securities, this opens up avenues for their circulation within a regulated environment.
Despite these advancements, the ethics provisions championed by Democratic lawmakers were rejected. Democratic members of the Banking Committee had previously argued for including a ban on virtual asset business participation by the President and members of Congress, along with mandatory disclosures.
This provision was seen as directly targeting President Donald Trump and his family’s virtual asset venture, currently operating under the name World Liberty Financial.
Experts anticipate ongoing criticism regarding the absence of ethics provisions during the bill’s integration with the Agriculture Committee’s version and its presentation to the full Senate.
Notably, Representative Ruben Gallego and Representative Angela Alsobrooks, both Democrats who supported the markup, have stated they cannot back the bill without the addition of ethics provisions.
