The US Senate Banking Committee confronts a torrent of amendments to the CLARITY Act, with lawmakers submitting more than 100 proposals ahead of the upcoming markup session. This deluge of changes spotlights key disputes over how stablecoin rewards are treated, whether crypto firms can access Federal Reserve accounts, and how digital assets might be used for tax payments. These issues are fueling one of Washington’s most robust debates on crypto regulation yet.
The contested amendments reveal the competing interests at play. Senator Elizabeth Warren leads the charge with over 40 amendments, including one aimed at barring the Federal Reserve from granting master accounts to cryptocurrency companies. Meanwhile, Senator Jack Reed has proposed an amendment that would prohibit cryptocurrencies from serving as legal tender for public obligations, like tax payments. This directly challenges efforts within parts of the crypto industry to broaden digital assets' role beyond investment into everyday commerce and government transactions.
The Senate Banking Committee’s renewed focus on crypto market structure follows the release of new bill language crafted by Chairman Tim Scott alongside Senators Cynthia Lummis and Thom Tillis. The updated text, informed by bipartisan input from regulators, law enforcement, financial institutions, and industry innovators, is positioned as a measure to protect consumers and enhance national competitiveness. Scott emphasized that the bill aims to provide clarity, safeguards, and accountability for American families, small businesses, and investors.
Central to the debate is the treatment of stablecoin rewards. The bill proposes banning yield-generating incentives on dormant stablecoin balances that resemble traditional bank deposits, although it would permit rewards linked to transaction activity, such as payments. The Securities and Exchange Commission, Commodity Futures Trading Commission, and Treasury Department would collaborate to draft rules implementing this provision.
However, banking interests have pushed back strongly. Senators Reed and Tina Smith have introduced an amendment reflecting banks’ demands to tighten restrictions on stablecoin yields. Their proposal targets rewards that closely mimic deposit interest, forcing lawmakers to navigate a difficult choice between protecting the traditional banking system and accommodating emerging crypto platforms.