Senate Banking Committee Republicans released the draft text of the CLARITY Act, a major crypto market structure bill, ahead of a scheduled committee vote. Key provisions would permanently exempt Bitcoin and Ethereum from SEC securities regulation and create a 60-day automatic approval window for other digital assets, significantly limiting the agency’s oversight power. The draft follows months of negotiation, including a compromise on stablecoin yields that had previously stalled the legislation.
The Senate Banking Committee released draft text for the CLARITY Act that could permanently exempt Bitcoin and Ethereum from federal securities law. Committee Chairman Tim Scott, Subcommittee on Digital Assets Chair Cynthia Lummis, and Senator Thom Tillis jointly released the text after months of bipartisan negotiations.
A key provision would bar the U.S. Securities and Exchange Commission from classifying any token serving as the principal asset of a U.S.-listed spot ETF as of January 1, 2026 as a security. Another section prevents the SEC from classifying a digital asset as a security if a U.S. court previously issued a non-appealable judgment finding it was not.
Section 102 of the draft creates a certification process where a token issuer can submit evidence to the SEC that their token is not a security. The filing becomes legally effective if the agency does not object within 60 days.
Analyst Dominic John told media this “creates a silence equals safe harbor regime” where SEC non-response effectively grants regulatory legitimacy. He warned this risks a scenario where “speed supersedes scrutiny” and shifts the burden from issuer accountability.
The bill stalled in January after Coinbase pulled its support over stablecoin yield restrictions, delaying a committee vote. Tillis and Senator Angela Alsobrooks later brokered a yield compromise to resolve the issue.
Louis Bellet, co-founder of Yellow Network, stated the yield compromise resolves “one of the remaining open questions that was giving institutional participants reason to wait.” He added that market makers have been operating in a holding pattern because the regulatory perimeter was undefined.
