Clarity Act Senate Markup Begins: Crypto Regulation Faces Final Hurdles Before Trump’s Desk” (Alternative options if preferred:) “Senate Pushes Forward on Clarity Act: Stablecoin Yields, Ethics & Trump’s Crypto Ties at Stake” “Crypto’s Clarity Act in Senate Spotlight: 130 Amendments, Thin Margins & Political Battles

The U.S. Senate Banking Committee is set to begin a critical markup of the Digital Asset Market Clarity Act—commonly known as the Clarity Act—on Thursday, May 14, 2026, marking a pivotal moment for crypto regulation in the United States. The bill, which passed the House of Representatives last year, aims to establish a comprehensive regulatory framework for digital assets, but its path to final passage remains fraught with political and industry divisions.

The markup follows months of negotiations and setbacks, including a withdrawal of support from Coinbase over a proposed ban on stablecoin rewards. While a compromise on stablecoin yield was later reached between Sens. Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.), banking lobby groups have since intensified opposition, sending more than 8,000 letters to Senate offices criticizing the compromise as overly favorable to stablecoin companies. The American Bankers Association and other financial institutions argue that stablecoins could erode traditional bank deposits, a concern that has complicated the bill’s progress.

Senate Banking Committee Chairman Tim Scott (R-S.C.) is expected to emphasize three core goals during the markup: protecting “Main Street” investors, safeguarding national security, and preserving U.S. Leadership in crypto innovation. Democrats, however, are pushing for additional ethics provisions to address concerns about President Trump’s family members’ involvement in the crypto sector. A Senate aide told Fortune that Democrats view ethics reforms as non-negotiable, warning that without them, the issue may be excluded entirely from the final legislation. The two parties have held multiple closed-door meetings this week to negotiate the inclusion of these guardrails.

Sen. John Kennedy (R-La.), a key Republican holdout on the Banking Committee, announced his intention to support the bill, a development that could bolster its chances of advancing to the full Senate for a vote. However, the bill’s prospects remain uncertain as the legislative session nears the summer recess and the midterm elections approach. Prediction markets, such as those on Polymarket, have scaled back their optimism, now assigning the bill only a 60% chance of passing this year.

Industry stakeholders, including Ethereum-focused advocacy group Etherealize, have expressed cautious optimism. Steve Yelderman, the group’s general counsel, told Fortune that while the bill’s progress has been encouraging, “anything could happen” in Washington. “That said, I think it’s going to pass, based on all the great progress that has been made on both sides of Congress, and the support this bill is getting from the White House,” he added.

Over 130 proposed amendments have been filed ahead of the markup, with 44 submitted by Sen. Elizabeth Warren (D-Mass.). These amendments range from minor technical adjustments to broader policy shifts that could reshape the bill’s final form. Among the most contentious issues are the treatment of stablecoin rewards, the scope of regulatory oversight for digital asset platforms, and the potential national security risks posed by unregulated crypto markets.

The Clarity Act’s potential passage would mark a significant milestone for the crypto industry, providing long-awaited clarity on compliance requirements, consumer protections, and market stability. However, the bill’s fate hinges on resolving deep divisions between financial institutions, tech advocates, and lawmakers—particularly over the balance between innovation and risk mitigation. With time running short before the summer recess, the markup on Thursday will be a critical test of whether Congress can deliver on its promise of regulatory certainty for digital assets.