Senate Crypto Bill hits critical junction as Trump-linked ethics fight tests bipartisan deal

A U.S. Senate effort to overhaul crypto market structure through the CLARITY Act is approaching a mid-May committee markup, though negotiations remain strained by disputes over ethics rules, stablecoin yield provisions, and political concerns tied to Donald Trump’s crypto-related business interests.

The legislation would establish a federal framework dividing oversight of digital assets between the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), a long-sought regulatory clarity effort for the industry.

Bipartisan agreement remains uncertain as lawmakers struggle to resolve both technical and politically sensitive issues.

Legislative push toward May markup

Sen. Tim Scott, chair of the Senate Banking Committee, said the CLARITY Act is nearing a critical stage, with lawmakers aiming for a bipartisan committee vote in May. Sen. Thom Tillis told Politico he would oppose final passage without ethics provisions included.

SEC Chair Paul Atkins described the agency’s March guidance as “an important bridge” while Congress develops permanent rules, Axios reported.

The House passed its version in July 2025 by 294–134, including 78 Democrats. The Senate Banking Committee released a 278-page draft in January 2026, but multiple scheduled markups have been postponed.

Banks continue to oppose proposals that would let crypto firms offer yield on stablecoin deposits. Standard Chartered estimates stablecoins could divert up to $500 billion in US bank deposits by 2028, per Reuters.

A White House Council of Economic Advisers report countered that stablecoin yield would displace only about 0.02% of total bank loans, roughly $2.1 billion, as Cryptopolitan reported when industry group NC Blockchain pushed Tillis to advance the bill last week.

Trump crypto ties drive ethics standoff

Bloomberg reported Trump has earned at least $1.4 billion through crypto-related ventures, including World Liberty Financial, a decentralized finance and stablecoin project. His family also holds a stake in bitcoin mining firm American Bitcoin.

Democrats argue that these financial ties raise the potential for conflicts of interest in shaping digital asset regulation. Sen. Angela Alsobrooks (D-Md.) told The Block that bipartisan support depends on resolving ethics and illicit finance concerns.

Earlier this year, the Senate Agriculture Committee advanced a related crypto bill without Democratic support, with lawmakers citing Trump-related crypto ties as a key concern.

Vote math tightens as time runs out

The bill needs 60 Senate votes, meaning unanimous Republican support plus seven Democrats. That path tightened after Sen. John Kennedy said he would not support it, per Punchbowl News. Kennedy’s defection drops effective Republican backing to 52 from 53, raising the Democratic threshold from seven to eight.

Polymarket odds moved from 38% to 46% over the past week. Estimates cited by The Block place the probability between 15% and 50%.

Sen. Cynthia Lummis has warned that failure to pass this Congress could delay comprehensive crypto regulation for years. Sen. Bernie Moreno delivered an ultimatum at a Washington event on April 22, declaring the bill must clear Congress by end of May.

Digital policy analyst Adrian Wall told Reuters: “If this doesn’t get passed and put in front of the President’s desk by July, I think everyone feels that window will have been closed because of the mid-terms.”

The Polymarket move suggests the market sees the path widening. The 60-vote math says it has not widened by enough.

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