The CLARITY Act, aimed at providing regulatory clarity for digital assets, is advancing in Washington with hopes of passage by mid-2026. Negotiations focus on stablecoin yields, drawing involvement from President Trump and industry leaders. The bill could benefit ISO 20022-compliant coins like XRP and Stellar amid ongoing debates between banks and crypto firms.
The Digital Asset Market Clarity Act, known as the CLARITY Act, is a proposed US legislation designed to establish clear rules for digital assets and delineate regulatory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Currently navigating the Senate, the bill addresses ambiguities that have hindered institutional adoption of cryptocurrencies in the United States.
Key advocates, including Kristin Smith, project passage by July 2026, aligning with JPMorgan analysts' mid-year timeline. Ripple CEO Brad Garlinghouse expressed optimism, estimating a 90% probability by April. Earlier this year, Coinbase CEO Brian Armstrong withdrew support, citing provisions that favor traditional banks over crypto-native companies, but the bill has since regained momentum.
Central to negotiations are provisions on stablecoin yields. Banks argue that rewarding stablecoin holdings could undermine deposits essential to their operations, with Standard Chartered estimating potential reductions by one-third of stablecoin market capitalization. Crypto representatives, however, see shared challenges with community banks. Blockchain Association CEO Summer Mersinger noted that White House involvement adds momentum, while Digital Chamber CEO Cody Carbone expressed optimism about discussions with Senator Thom Tillis on stablecoin yields.
President Donald Trump has intervened, arguing on Truth Social that banks should not undermine the recently passed Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act. After meeting Armstrong, Trump emphasized advancing the CLARITY Act to position the US as the crypto capital. JPMorgan CEO Jamie Dimon indicated openness to limited stablecoin rewards, provided they do not mimic savings interest and crypto firms adhere to banking regulations. Eric Trump criticized banks as "anti-consumer and straight-up anti-American" on X.
Support comes from Senators Chuck Schumer and Ruben Gallego, with Trump advisors David Sacks and Patrick Witt aiding policy disputes, countering opposition from Senator Elizabeth Warren over consumer protections. Senators Tillis and Angela Alsobrooks are reviewing banker proposals on stablecoin rewards. If advanced through the Senate Banking Committee markup, it would merge with a prior Agriculture Committee version, requiring Democratic backing for full Senate passage.
The timeline is tight, with Senate floor time limited before midterm elections. Passage could accelerate integration of ISO 20022-compliant assets like XRP, Stellar (XLM), Algorand (ALGO), Hedera (HBAR), and IOTA into financial infrastructure, particularly cross-border payments. Bitcoin holders also stand to gain from reduced regulatory uncertainty.
