In a significant move for cryptocurrency regulation, the Senate Banking Committee voted 15 to 9 on May 14 to advance the Digital Asset Market Clarity Act, also known as the CLARITY Act. This bipartisan vote, which included support from two Democratic senators, has sparked a rally in crypto-related stocks, with Coinbase Global Inc. leading the charge.
Coinbase’s shares surged 8% following the committee’s decision, reflecting growing investor optimism that clearer regulatory frameworks could pave the way for greater institutional involvement in digital assets. The positive sentiment extended beyond Coinbase, as Bitcoin briefly touched $82,000 before settling around $81,500, marking a 2.5% increase over the past day. Other crypto-linked equities also saw gains, with Strategy climbing 7% and Bitmine advancing 5.6%. The broader market joined the rally, with the Nasdaq 100 and S&P 500 reaching new record highs.
The CLARITY Act’s journey is far from over. It now faces a full Senate vote, where it will need to secure at least 60 votes to pass. This means additional Democratic support will be crucial, beyond the two senators who voted in favor during the committee stage. After the Senate, the bill must be reconciled with a version already approved by the House of Representatives before it can be sent to the White House for the President’s signature. Senator Bernie Moreno has cautioned that if the bill does not advance by the end of May, crypto market structure legislation could be delayed for years.
A key compromise on stablecoin yields, brokered by Senators Thom Tillis and Angela Alsobrooks, removed a major obstacle that had previously stalled the legislation. This compromise, described by Coinbase CEO Brian Armstrong as a deal that left both sides slightly dissatisfied, is seen as evidence of a genuine middle ground in the negotiations. Armstrong had publicly endorsed the bill ahead of the vote, calling it “closer than ever” to becoming law.
The 309-page bill, as published by the Senate Banking Committee, still includes outstanding issues, particularly regarding ethics rules for government officials’ cryptocurrency holdings. Democratic senators have made support at the floor stage contingent on resolving these provisions. The committee’s vote, however, gives the CLARITY Act its clearest path forward since it hit a roadblock in January, when Coinbase temporarily withdrew its support over the stablecoin yield issue that has since been resolved.