The Zhitong Finance App learned that before the US stock market on Tuesday, cryptocurrency stocks such as Circle (CRCL.US) and Coinbase (COIN.US) fell more than 5%. According to reports, the US Senate is scheduled to hold a key procedural vote on the Digital Asset Market Clarity Act (CLARITY Act) at 2:15 p.m. EST on Tuesday. At least 60 votes are required to enter the follow-up process.
The bill aims to establish a new regulatory framework for cryptocurrencies and other digital assets. The Republican Party currently holds 53 seats, so the outcome will depend on the Democrats. The crypto industry began final lobbying before the vote, banking groups continued to pressure the bill's stablecoin provisions, and the New York Attorney General called on Congress to block the bill.
Crypto industry launches final offensive: CLARITY bill welcomes key Senate vote
Coinbase Global Chief Policy Officer Faryar Shirzad urged Senate Democrats to support the bill a few hours before it faced its first full Senate vote. Shirzad said the CLARITY Act met all seven priorities put forward by Senate Democrats and called on them to support the bill in the upcoming Senate vote. “The legislation currently being considered by the Senate covers each of the seven pillars,” he said.
The framework mentioned by Shirzad was released by 12 Democratic Senators, clarifying what any crypto market structure bill should achieve. The framework calls for establishing rules for spot crypto trading, clarifying which regulators oversee which assets, and also seeks to include token issuers and trading platforms within the scope of regulation. Other pillars focus on fighting illegal finance, preventing corruption, and ensuring fair and effective regulation. The anti-corruption pillar aims to prevent officials and their families from profiting from corruption. According to reports, the Democratic Party wants to restrict US President Trump from profiting from his family's crypto business. The Republican Party, on the other hand, advocates that the Democratic Party first supports the promotion of the bill and then continue negotiations during the Senate review period.
Shirzad said the final text also included 126 revisions requested by the Democratic Party. He said the bill gives state attorneys general more powers and establishes stricter rules for the supervision of illegal finance. He said, “Democratic negotiators have played an important role in pushing the bill to this point. They should have voted for it.”
However, crypto journalist Eleanor Terrett posted on X on Monday that a group of Senate Democrats will meet that night to discuss a counterproposal. She previously reported that the Republican Party has submitted the latest text, that is, its “last, best, and final” plan. Terrett said in a later post that industry sources expect the counterproposal to cover most or all of the Republican Party's latest revisions.
Stablecoin yield clause provokes controversy: banks oppose, White House defends
Reporter Eleanor Mueller reports that almost all banking groups have signed a letter criticizing the bill's provisions on stablecoin earnings. The core concern is that such provisions will lead to large-scale outflows of bank deposits. Specifically, banks believe that stablecoin interest payments will create unfair competition: banks cannot pay high interest on deposits due to regulatory restrictions, yet cryptographic platforms can provide income in disguise by holding stablecoins, attracting depositors to move funds away from banks and weakening banks' ability to lend. Although a “fusing mechanism” was added to the bill as a compromise, banking industry groups believe that the mechanism's response has been delayed, and the damage may have occurred before regulatory intervention.
US Treasury Secretary Scott Bessent said in a post on X that the final draft gives the Treasury Secretary additional powers to respond when stablecoins begin to damage community banks. He wrote, “If stablecoins cause damage to community banks, I won't hesitate to use these tools to ensure they are fully protected.”
White House cryptocurrency adviser Patrick Witt agreed, saying in his post that bank deposits are rising rather than falling, adding that banks will lose these protections if the bill fails to pass. Grayscale (Grayscale) also shared a chart showing that the probability of the bill being passed this year soared to about 29%, which means that the market's prospects for customs clearance of the bill are becoming more optimistic.
In a letter to US Senate Chairman and Senior Councilor Tim Scott (South Carolina Republican) and Senator Elizabeth Warren (Massachusetts Democratic Party), New York Attorney General Letitia James and the Coalition warned that the CLARITY Act would threaten their ability to protect investors from rampant cryptocurrency fraud and scams. The coalition said the bill would not be able to fight the growing “cryptocurrency fraud epidemic” if passed.
Although Circle and Coinbase are seen as beneficiary stocks after the bill was passed, their stock prices declined before the market was dragged down by the overall weakness of the tech industry. On Stocktwits, retail sentiments about Circle changed from “extremely bearish” to “bearish,” and discussions remained at a “low” level for the past 24 hours. Retail perceptions of Coinbase remain “bearish,” while the heat of discussion has risen from a “low” level in the past 24 hours to a “normal” level.