CLARITY Gets a Win

CLARITY Act hit an important milestone yesterday.

That’s when the Senate Banking Committee held a markup session. The Committee also took a vote on moving the bill to the Senate floor.

We’ve covered this legislation at length — most recently via The Gloves are Coming Off and Ring the Bell.

It’s set to lay the regulatory framework for the digital assets industry. It should give builders and innovators clear standard operating procedures to exist within the United States.

It’s a big deal.

And what we learned yesterday is that we should be optimistic.

That’s because when it comes to committee votes, there wasn’t a concern that the bill would make it out. That’s because Republicans hold 13 seats in the committee compared to the 11 held by Democrats.

We only need a majority vote for a bill to move out of Committee and to the floor for a Senate vote.

The only Republican who openly opposed the CLARITY Act was Senator Thom Tillis of North Carolina. But he changed course a couple of weeks ago, which is partly why the vote was finally held yesterday.

What we were unsure of going into yesterday was whether any Democrats would vote in favor of the bill.

That’s what really mattered.

That’s because if the bill comes out of committee with one Democrat in favor, then the bill is viewed not only as a bipartisan piece of legislation…but one that has more than enough support to pass.

And let’s not forget… It’s already cleared the House.

All 13 Republicans and two Democrats voted yes. Final tally: 15-9.

That’s a big W.

This was unexpected, but in a good way.

Let me explain…

The Last-Minute Rush

There were more than 100 amendments filed for the landmark digital asset bill.

Forty of these amendments came from Senator “building an anti-crypto army” Warren.

Even for the Senate, this is a lot of amendments. Bills typically see a dozen or two, not more than a hundred. And it’s very unusual to see so many come from just one senator. It was more like a distributed denial of service (DDoS) attack, which is when an attacker overwhelms a website’s server by flooding it with requests, causing it to malfunction.

The president’s Executive Director on the Council of Advisors for Digital Assets, Patrick Witt, wasn’t shy with his response. And it was dripping with sarcasm:

I’m so impressed that Elizabeth Warren stayed up all night to read the 300+ pages of the CLARITY Act and deliver an objective assessment of the bill’s merits and not just some knee-jerk reaction. This is what true public service looks like.

The jabs continued even during the markup session.

Senator Lummis was gracefully direct. During a back-and-forth with Senator Warren, Lummis was reading the exact text that addressed one of Warren’s concerns… But instead of trying to work in good faith, Warren used it as an opportunity to talk to the cameras, not her colleagues.

I’m sure it’s not the end of Warren’s tactics.

But for now, her efforts are likely to fall short.

The main concern now is what we mentioned in Ring the Bell – Ethics. Particularly, it will be about the president’s involvement in the digital asset industry.

In Trump’s Crypto Sideshow, we broke down the president’s involvement in crypto via World Liberty Financial. Trump’s involvement has become a rallying point for Democrats. And frankly, they are right to.

We mentioned earlier we didn’t expect to see a concession on this just yet. But as the bill moves to the Senate Floor, the White House may be forced to budge.

But we can be optimistic. That’s because Senator Ruben Gallego (D-AZ) voted in favor of CLARITY Act. And he’s been actively pushing for strict ethics guardrails in the bill.

His vote is a signal that a deal and compromise look likely. We’ll likely see other Democrats vote in favor if the ethics language is satisfactory.

Momentum is strong. Based on the Senate’s schedule, the second or third week of June looks to be when this will move toward a vote. That would keep the current administration’s July 4 signing date as a realistic option.

We could be less than two months away from a landmark crypto bill becoming an actual catalyst.

Everybody watching this legislation knows that…

Polymarket, the event-driven marketplace, has placed odds of CLARITY Act passing in 2026 at 70%. This is up from 46% just two weeks ago.

Wall Street definitely knows CLARITY’s chances are looking good (more on that in future issues).

But for now, let’s focus on what to expect when it comes to this bill.

A Surprise Amendment

There are a few items we should note…

First, disclosures.

It’s no secret I’m an advocate for token issuers and projects filling out disclosures. Investors should have more information related to simple things like total amount of supply in circulation, total amount of new supply arriving in the coming months, and even who holds a significant sum of the token.

This would make cryptocurrencies more attractive as an investment. And CLARITY Act looks to build this into existence.

The second thing is Amendment #133.

This one was a bit of a surprise. It establishes AI Innovation Labs.

Think of it as a sandbox where regulators and lawmakers monitor the space before drafting legislation.

It signals that regulators understand that once finance moves onchain via Project Crypto, an initiative being pushed by the SEC, CFTC, and White House, AI tooling will be the next wave of iteration in digital assets.

It’s a topic we’ve been hammering hard at Brownstone Research – the nexus of Crypto and AI will turbocharge transactions, fee generation, and innovation as financial assets move onchain.

The last thing we should expect, and this is one that looks to be significant…

The Strategic Bitcoin Reserve.

We’ve heard comments from the administration and even high-ranking U.S. military officials saying Bitcoin is a national priority. A Strategic Bitcoin Reserve would be a modern-day version of the U.S. gold reserve in Fort Knox.

The administration is clearly eager to reveal how the U.S. will build the reserve.

Details remain under wraps, but the announcement should come when CLARITY Act is signed.

That means plenty of positive catalysts ahead for the industry.

We’ll have more on how the industry is positioned next time…

Your Pulse on Crypto,

Ben Lilly
Editor, Chain of Thought