Senate Banking Committee Advances CLARITY Act in Landmark Cryptocurrency Vote
The Republican-led Senate Banking Committee advanced the CLARITY Act on May 14, clearing the long-awaited digital asset legislation through markup in what lawmakers described as a milestone for United States cryptocurrency market structure. The bill would establish the first comprehensive federal framework governing which digital assets qualify as commodities versus securities.
The vote came as Bitcoin fell below $80,000, with traders citing inflation data and leveraged long liquidations alongside regulatory uncertainty as drivers of the move.
What the CLARITY Act Does
The CLARITY Act is designed to resolve a years-long jurisdictional dispute between the Securities and Exchange Commission and the Commodity Futures Trading Commission over digital asset oversight. Under the bill’s framework, assets that meet a defined decentralization threshold would fall under CFTC jurisdiction as commodities, while tokens tied to investment contracts would remain with the SEC.
According to Reuters, the committee markup on May 14 represents the furthest the legislation has advanced in either chamber of Congress. The bill now moves toward a full Senate floor vote, though a timeline for that vote has not been set.
Background
The CLARITY Act has been in legislative development since 2023, when a version of the bill first circulated in the House.
Senate sponsors reintroduced and revised the measure in 2025, building bipartisan support through a series of committee hearings focused on exchange failures and investor protection gaps exposed by the collapse of FTX in late 2022. The cryptocurrency industry has pressed for regulatory clarity throughout that period, arguing that the SEC’s enforcement-first approach created legal uncertainty for exchanges, token issuers, and institutional participants.
A prior vote on a separate stablecoin measure in the Senate earlier this year demonstrated that cross-aisle support for digital asset legislation had grown measurably.
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Market Reaction and What to Watch
Bitcoin (BTC)‘s drop below $80,000 on May 14 coincided with the markup session, though analysts attributed the move primarily to a hotter-than-expected inflation print rather than the vote itself. Leveraged long positions totaling approximately $400 million were liquidated across major exchanges during the session, according to market data.
The committee’s approval does not guarantee floor passage. The Senate’s legislative calendar remains crowded, and companion House legislation would need to align with the Senate version before a final bill could reach President Donald Trump for signature.
Trump has publicly supported pro-cryptocurrency legislation, making a signature likely if the bill clears both chambers.
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