Key Takeaways:
The U.S. Senate Banking Committee released the 309-page draft text for the CLARITY Act, proposing a permanent exemption from securities law for crypto assets with approved ETFs as of Jan. 1, 2026, ahead of a committee vote Thursday.
The bill “delivers the certainty, safeguards, and accountability Americans deserve," Committee Chairman Tim Scott said in a joint statement with Senators Cynthia Lummis and Thom Tillis.
A key provision, Section 105, would bar the Securities and Exchange Commission from classifying any token that backs a U.S.-listed spot exchange-traded product as a security after the 2026 cutoff, effectively shielding Bitcoin and Ethereum. Section 102 creates a process where a token is deemed a non-security if the SEC fails to object to an issuer’s certification within 60 days.
The bill requires at least 60 votes for full Senate passage, a threshold that requires Democratic support. That support is contingent on adding ethics provisions, a negotiation that could push the final vote to a target of early August, according to Senator Kirsten Gillibrand.
The legislation also tackles stablecoins, imposing a strict 1:1 reserve mandate that requires issuers to back their tokens with high-quality liquid assets like short-duration U.S. Treasuries. This would force issuers like Tether, whose reserves include assets like corporate paper and secured loans, to change their backing structure. Circle, issuer of the USDC stablecoin, is already largely compliant.
A hard-fought compromise on yield-bearing stablecoins permits interest payments under specific conditions. While Coinbase CEO Brian Armstrong called the outcome workable, the American Bankers Association has lobbied against the provision, warning it could drain deposits from insured banks. Research from Galaxy Digital countered that argument, projecting that stablecoin growth will be driven by offshore demand, funneling foreign capital into U.S. Treasuries.
The proposed framework has drawn criticism for potentially creating regulatory gaps. The 60-day certification window “creates a silence equals safe harbor regime” where SEC non-response “effectively grants regulatory legitimacy without full substantive review,” Dominic John, an analyst at Zeus Research, told Decrypt.
John also warned that anchoring non-security status to a fixed ETF approval date "prioritizes market maturity over reality," and could exempt assets from investor protection standards regardless of how they evolve. The bill now heads to a committee markup on Thursday, the next step in a legislative process that could provide the U.S. crypto industry its first comprehensive regulatory framework.
This article is for informational purposes only and does not constitute investment advice.
