Clarity Act Passed, But DeFi Advocates Have Bad News in This Crypto Market Structure Bill

The U.S. Senate Banking Committee finally voted for the much-awaited Clarity Act, aka the crypto market structure bill, on May 14. After over 100 amendments brought earlier this week, the deal between Republicans and Democrats was finally brokered. Industry leaders celebrated this development as the bill proceeds for a final vote in the Senate before becoming law.

Clarity Act Passes With Bipartisan Support

The proposed CLARITY Act has officially passed out of the U.S. Senate Banking Committee with bipartisan support. It marks a milestone for crypto regulatory actions in the United States.

The legislation will now move to a full Senate vote, where it is expected to face a higher approval threshold requiring 60 votes to advance further. This crypto market structure bill will bring a clear regulatory framework for digital assets, which will operate under the jurisdiction of the U.S. Securities and Exchange Commission (SEC), and the Commodity Futures Trading Commission (CFTC).

Supporters of the bill argue that the framework could help end years of regulatory uncertainty. But before becoming law, the legislation must still clear the full Senate. It must also reconcile differences with the Agriculture Committee’s version of the bill, pass the House of Representatives, and receive presidential approval.

Clarity Act Disappoints DeFi Supporters

The bipartisan vote between the Republicans and Democrats finally came through, allowing the passage of the Clarity Act through the U.S. Senate Banking Committee. According to sources familiar with the matter, the compromise involved changes to an amendment proposed by Cynthia Lummis.

This involved the removal of the language from Section 301 referencing the Blockchain Regulatory Certainty Act (BRCA). The revision disappointed some DeFi advocates, who argued that removing the BRCA-related language could weaken legal protections for non-custodial software developers.

Meanwhile, Mark Warner reportedly declined to vote in favor of advancing the bill despite speaking positively about the negotiated changes. At the same time, Bernie Moreno stated during the hearing that additional work is still needed on Section 301.

This shows that negotiations will continue in coming weeks between the Senate Banking Committee Republicans and the Senate Agriculture Committee, and merge both versions of legislation ahead of a full Senate vote.

Industry Leaders Celebrate the Crypto Market Bill

Several crypto industry leaders celebrate the bipartisan vote and the passing of the crypto market structure bill. Ripple’s Chief Legal Officer Stuart Alderoty said: “This is the moment the crypto industry has been fighting for. A 15-9 bipartisan vote is a monumental outcome – and a clear signal that Washington gets it”.

He further thanked all the members of the Senate Banking Committee for coming to a common consensus. Coinbase CEO Brian Armstrong also called it a “Historic day for crypto and for the future of digital assets in America. Grateful for the countless hours from lawmakers and staff to strengthen this legislation. Big improvement from where we were in January on rewards, tokenization, DeFi, and CFTC authority. I’m proud we stood up for our customers in that moment, and the bill is better because of it”.