The US Digital Asset Market CLARITY Act advanced a step closer toward becoming a law with a 15-9 bipartisan vote from the Senate Banking Committee. The bill is considered a notable regulation in US history, and seeks to give a more definitive legal shape to the digital asset landscape by splitting the regulatory functions among the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
After committee approval, Bitcoin rallied above $81,000, and XRP rose by around 5%, reflecting optimism across the crypto market. The legislation still has several political, procedural, and regulatory challenges to clear before it can become law.
The voting threshold remains one of the major problems. Republicans currently control 53 Senate seats, which means at least seven Democrats are needed to overcome a filibuster and advance to a vote in the Senate.
It has some bipartisan support, even though Democratic Senators Ruben Gallego and Angela Alsobrooks voted for the committee version. Several legislators are advocating for more robust anti-money laundering measures, enhanced regulation of stablecoins, and more stringent ethics guidelines regarding public officials' investments in crypto.
The bill also needs to incorporate another bill from the Senate Agriculture Committee, which is responsible for the CFTC. Rising concerns are that the two plans might resurface debates on stablecoins, DeFi safeguards, crypto exchange legislation, and developer safe-harbors.
The other major disagreement is regarding any ethics clauses for political candidates and their families in crypto-related enterprises.
Some Democrats want to impose even tougher measures to ban financial gains for elected officials from any crypto-related activities while in office. Donald Trump has made a series of moves that make this issue more sensitive, as the president has grown closer to digital asset companies and cryptocurrency-related businesses associated with his family.
According to reports, some Republican allies fear aggressive ethics restrictions could trigger opposition from the White House or complicate bipartisan negotiations further.
Also opposing parts of the bill are traditional banking groups, which are lobbying heavily. Stablecoin reward programs have drawn the attention of banks, fearing they might prompt deposit outflows from banks.
Stablecoin industry groups are reportedly lobbying lawmakers, seeking to tighten the regulations on stablecoin returns and cut the stablecoin developer protections.
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The SEC and the CFTC would need approximately 360 days to finalize and publish rules to operate crypto firms, exchanges, brokers, and token issuers.
The US market is thrilled with the CLARITY Act, which marks a significant milestone in the journey toward regulatory clarity for digital assets in the United States. But while the Senate has been working on a compromise and the House is selecting a plan for reconciliation, as well as tabling ethics questions and struggling under lobbying pressure, the race to final approval is far from over.