Clarity Act draft adds 1 housing bill to win key votes

The Senate Banking Committee released a 309-page draft of the CLARITY Act on May 12, scheduling a markup vote for May 14 that could define the future of crypto in the U.S. Prediction markets on Polymarket pushed the odds of the bill becoming law in 2026 to 73 percent following the text's release, up from less than 50 percent in April.

"Including Build Now may be a way to solidify Kennedy’s support," Alex Thorn, head of firmwide research at Galaxy Digital, said in a post on X, referring to a housing bill introduced by Republican Senator John Kennedy and Democratic Senator Elizabeth Warren. "This adds a bit more bipartisan ‘gravitas’ to CLARITY, though the odds are low that notorious ‘anti-crypto army’ leader Warren votes for CLARITY just because Build Now is inside it."

The new text includes the "Build Now Act" as Section 904, a provision that would alter how the federal government distributes Community Development Block Grant money. According to Thorn's analysis, its inclusion is a political maneuver to ensure Senator Kennedy, who has been hesitant, votes in favor of the crypto bill. A "no" vote would mean killing his own housing initiative.

The bill, sponsored by Senators Tim Scott, Cynthia Lummis, and Thom Tillis, represents a critical step toward establishing a regulatory framework for digital assets. However, it faces a contentious path forward, with committee members filing over 100 amendments that signal continued resistance from Democratic lawmakers.

A Housing Bill in a Crypto Law?

The strategic inclusion of unrelated legislation highlights the political complexities surrounding crypto regulation. The Build Now Act has already passed the Senate twice but stalled in the House. Attaching it to the must-pass crypto bill gives it another chance at becoming law, while simultaneously pressuring its sponsors for support.

Senator Warren, a vocal critic of the crypto industry, has submitted more than 40 amendments herself. One proposal seeks to block the Federal Reserve from granting master accounts to crypto firms, a move that would severely limit their access to the traditional banking system. Another amendment from Senator Jack Reed aims to prohibit cryptocurrencies from being used as legal tender for payments like taxes.

SEC Powers Curtailed by Two Key Provisions

Two sections of the draft bill significantly constrain the Securities and Exchange Commission's ability to regulate digital assets. Section 105 would bar the SEC from classifying any token as a security if it was the primary asset of a U.S.-listed spot ETF as of January 1, 2026. This provision effectively grandfathers in Bitcoin and Ethereum, which already have approved ETFs.

Section 102 creates a 60-day certification window for issuers to argue their token is not a security. If the SEC does not object within that timeframe, the certification becomes legally effective. Dominic John, an analyst at Zeus Research, told Decrypt this "creates a silence equals safe harbor regime" where "speed supersedes scrutiny," potentially weakening investor protections.

The bill also contains a hard-won compromise on stablecoin yield, banning bank-like interest payments but allowing rewards tied to platform activity like staking or providing liquidity. While supported by Coinbase and the White House, the provision is heavily opposed by the American Bankers Association, which has sent over 8,000 letters to Senate offices lobbying against it.

Other key sections provide protections for software developers from being classified as money transmitters and safeguard customer assets in the event of an exchange bankruptcy. With the crucial vote just days away, the CLARITY Act's blend of regulatory clarity and political maneuvering makes its future far from certain.

This article is for informational purposes only and does not constitute investment advice.