Version

USDC

Yield

Polymarket

The U.S. Senate Banking Committee has <a href="https://www.banking.senate.gov/imo/media/doc/ehf26374.pdf" rel="noopener noreferrer nofollow">released</a> an updated draft of the CLARITY Act — one of the most comprehensive attempts to regulate the entire crypto market that Washington has ever put to paper.
Members have until tomorrow to file amendments before Thursday’s markup vote, and the American banking industry is already in full lobbying mode trying to stop it. Polymarket currently gives the bill a 73% chance of becoming law before the end of summer 2026.
The full name is the Crypto-Asset Legislation for Reform, Transparency, and Investor Protection Act. What it contains will affect every person who holds crypto, every bank that wants to offer digital asset services, and every stablecoin issuer operating in the United States.
Here is what is actually in it — explained in plain language.
Bitcoin and Ethereum Are Permanently Classified as Non-Securities
This is arguably the single most important provision in the bill for the long-term certainty of the crypto market. Any token that was the primary asset of a spot ETF as of January 1, 2026 is permanently classified as a non-security under U.S. law.
In practice, that means Bitcoin and Ethereum — along with any other tokens that received spot ETF approval by year-end — are locked into a clear legal category that cannot be reversed by future SEC action or enforcement. The years-long debate about whether ETH is a security ends here, if this bill passes. For institutional investors and developers building on these networks, that permanence is worth an enormous amount.
Staking Is Fully Protected
The bill carves out staking completely from securities regulation. This covers all forms — self-staking where you run your own validator, self-custodial staking where a third party operates the validator on your behalf, liquid staking where you receive a tradeable token representing your staked position, and custodial staking through an exchange or service provider.
Critically, the bill explicitly states that governance rights — the ability to vote on protocol decisions — do not disqualify a token from non-security status. This closes a theoretical attack vector that regulators had previously used to argue that tokens with governance functions were securities. If you stake and receive voting rights, that alone cannot be used against you.
The bill also introduces mandatory KYC and AML checks across crypto ATMs, custodians, and staking services, along with requirements to monitor and report suspicious transactions. The stablecoin interest ban is one of the most consequential provisions — specifically designed to stop payment stablecoins from functioning as de facto bank deposits that compete directly with traditional savings accounts. U.S. Releases New Version of CLARITY Act Ahead of Thursday’s Senate Vote On the developer side, the bill explicitly protects DeFi protocol builders from liability for how users interact with their code. Writing open-source infrastructure that someone else misuses does not make the developer criminally responsible. For the DeFi community, that protection matters as much as anything else in the bill.
Banks Can Now Offer Crypto Services Without Asking Permission First
Section 401 of the bill is significant for the institutional side of the market. It permits national banks, state banks, and credit unions to offer custody, staking, lending, payments, market making, and underwriting for digital assets — as activities incidental to the normal business of banking. No prior regulatory approval is required.
This is a meaningful change from the current environment, where banks interested in crypto services have had to navigate a patchwork of guidance letters, informal permissions, and regulatory uncertainty. The bill gives banks a clear green light to enter the space — which is precisely why the American Bankers Association is lobbying furiously <a href="https://x.com/CoinMarketCap/status/2054133496063615189?s=20" rel="noopener noreferrer nofollow">against</a> it.
The Stablecoin Yield Question — And Why Banks Are Panicking
Section 404 closes what the bill calls the stablecoin yield loophole for exchanges. Platforms will no longer be permitted to pay interest or yield on payment stablecoin balances. Activity-based rewards — staking returns, governance participation, loyalty programs — remain permitted. But if an exchange was effectively paying interest on USDC or USDT holdings the way a savings account pays interest on cash deposits, that practice ends.
This provision explains the banking industry’s intense opposition. If stablecoins cannot pay yield, their competitive threat to bank deposits is reduced. If they could pay yield, consumers would have a compelling reason to move money out of low-interest bank accounts into stablecoins — and banks would lose a funding source they have relied on for decades.
Senator Bernie Moreno, a supporter of the bill, did not mince words about the banking industry’s reaction.
<blockquote>
 “For decades, these banks have treated your deposits like their personal piggy bank, paying you next to nothing while lending YOUR money out for massive profits and executive bonuses. Now that innovative stablecoins threaten to break their monopoly and give you actual financial freedom? They’re running to Congress again, screaming about threats to economic growth and financial stability.”
</blockquote>
What the Bill Does Not Do
The CLARITY Act does not ban self-custody — you retain the right to hold your own crypto without a custodian. It does not punish developers for writing open-source code. And notably, it does not close the door on elected officials — including the president — profiting from crypto projects. Despite significant pressure from ethics watchdogs, that provision did not make it into the current draft.
What Happens Thursday
The Senate Banking Committee votes on the bill Thursday following the amendment filing deadline tomorrow. The American Bankers Association is urging member banks to contact senators directly before the vote, calling the stablecoin provisions an unacceptable threat to financial stability.
Whether that lobbying campaign shifts votes is the question the market is watching. At 73% on Polymarket, the smart money currently says the bill becomes law. If it does, the U.S. crypto regulatory landscape will look fundamentally different by summer — with permanent legal clarity for Bitcoin and Ethereum, protected staking across all configurations, and banks finally able to offer digital asset services without navigating regulatory fog.

U.S. Releases New Version of CLARITY Act Ahead of Thursday’s Senate Vote

CoinstelegramEng

Other articles published on May 12, 2026

Join our free newsletter for daily crypto updates!