Short answer: On July 22, 2026, a new consolidated Senate draft of the CLARITY Act, the U.S. crypto market structure bill, began circulating in Washington. The roughly 616-page text merges the Senate Banking and Agriculture Committee versions and adds an ethics title for officials that would expire in 2029, but Democrats and bank lobbyists said it still falls short, so passage before the August recess remained uncertain.
What happened
On Wednesday, July 22, 2026, a fresh text of the Digital Asset Market Clarity Act (CLARITY Act) was shared with crypto industry insiders and reported by Punchbowl News and CoinDesk. It was not yet an official release: according to CoinDesk, Democratic negotiators had not received the text when it first surfaced. Senator Cynthia Lummis (R-Wyo.), one of the bill's main sponsors, urged colleagues to move quickly.
The CLARITY Act is a market structure bill: it decides which crypto assets are regulated as securities by the U.S. Securities and Exchange Commission (SEC) and which as commodities by the Commodity Futures Trading Commission (CFTC), and sets rules for exchanges, brokers and token issuers. The new draft merges two committee bills into one text that could go to the Senate floor.
The main additions and carry-overs reported in the draft:
- Ethics title. The president, vice president, members of Congress and other senior officials would be barred from issuing or sponsoring digital assets for compensation while in office. Enforcement sits with the Department of Justice only, with civil fines reported at up to $250,000 per day, and the rule would sunset on January 20, 2029.
- DeFi developers. The Blockchain Regulatory Certainty Act language stays in: developers who never control user funds would not be treated as money transmitters.
- Consumer protection. New provisions on crypto ATM fraud, freezing suspicious assets and anti-money-laundering (AML) compliance.
- Federal Reserve. Limits on Federal Reserve Banks offering certain products directly to individuals and a ban on a central bank digital currency (CBDC) for monetary policy.
Why the ethics rule became the sticking point
Democrats have made a conflict-of-interest clause their condition for support, pointing to the Trump family's crypto ventures. The draft includes such a clause, but in a form Democrats called too weak. Senator Angela Alsobrooks (D-Md.) described DOJ-only enforcement as an unserious offer, and Senator Elizabeth Warren (D-Mass.) argued the text leaves out the president's main crypto income sources. A group of seven Democratic negotiators said the text falls short.
The arithmetic explains why this matters. Republicans hold 53 Senate seats, and a floor vote needs 60 to overcome a filibuster, so at least seven Democrats must vote yes. With about 16 days of Senate session left before the summer recess, every open dispute eats into a very short window.
How the CLARITY Act got here
| Date | Step | Result |
|---|---|---|
| July 17, 2025 | House of Representatives vote | Passed 294–134 |
| January 29, 2026 | Senate Agriculture Committee (commodities title) | Advanced 12–11, party line |
| May 14, 2026 | Senate Banking Committee markup | Advanced 15–9, two Democrats in favour |
| July 22, 2026 | Consolidated Senate draft circulates | About 616 pages; floor vote not yet scheduled |
The bill builds on the GENIUS Act, the stablecoin law signed in July 2025, which already bans stablecoin issuers from paying interest to holders. The unresolved question is whether exchanges and other third parties may pay rewards on stablecoin balances.
Why banks still oppose the stablecoin yield rules
The American Bankers Association, the Bank Policy Institute and the Consumer Bankers Association issued a joint statement saying the updated text still puts at risk the local lending that drives the U.S. economy. Their argument: if crypto platforms can offer interest-like rewards on dollar stablecoins, deposits may migrate out of banks, leaving less money for mortgages and small-business loans. Crypto companies have argued that rewards are an ordinary competitive product. The draft did not settle this fight, and the banks said negotiations with senators continue.
What it means for you
Nothing changes today: the draft is a negotiating text, not law. The direction still matters if you use U.S.-facing platforms.
- Stablecoin rewards may change. If lawmakers tighten the yield rules, reward programs on USDC or USDT balances at exchanges could shrink or disappear. Do not treat such rewards as a guaranteed income stream.
- Self-custody and DeFi keep their protection in this text. The non-custodial developer safe harbour survives, which matters for wallets and swap tools that never hold your funds.
For how stablecoins differ from bank deposits, see our guide on what a stablecoin is covers the basics.
Key takeaways
- A consolidated, roughly 616-page Senate draft of the CLARITY Act circulated on July 22, 2026.
- It adds an ethics title barring senior officials from issuing crypto, enforced only by the DOJ and expiring on January 20, 2029.
- Seven Democratic negotiators said the text falls short; the bill needs 60 Senate votes.
- Major U.S. bank groups still object to the treatment of stablecoin yield.
- Protection for non-custodial DeFi developers remains in the draft.
Regulation shapes where and how you can trade, but a non-custodial route stays simple: you can compare direct pairs on the exchange directions page and see the final amount before you send anything.
Sources: CoinDesk, Dodd-Frank Update, Tech Times, Latham & Watkins
Frequently asked questions
What is the CLARITY Act in simple terms?
The CLARITY Act is a proposed U.S. law that splits crypto oversight between the SEC and the CFTC and sets rules for exchanges, brokers and token issuers. The House passed it in July 2025; the Senate is still negotiating its version.
What does the ethics rule in the new CLARITY Act draft do?
It bars the president, vice president, members of Congress and senior officials from issuing or sponsoring digital assets for pay while in office. In the July 22, 2026 draft only the Department of Justice can enforce it, and it expires on January 20, 2029.
Will the CLARITY Act ban stablecoin rewards?
That is still being negotiated. Stablecoin issuers already cannot pay interest under the 2025 GENIUS Act; the July 22, 2026 draft did not restrict third-party rewards as tightly as bank groups want, which is why they still oppose it.
