U.S. Senate Banking Committee Proposes the Clarity Act to Regulate Digital Assets

May 12, 2026, 16:54

Introduction

The U.S. Senate Banking Committee has published the text of the Clarity Act. This new legislative proposal aims to clearly define which financial regulators are responsible for overseeing cryptocurrencies.

Main Body

The proposed law seeks to standardize how digital assets are regulated. For example, the bill prohibits rewards on stablecoin balances that act like bank deposits, although it allows rewards for transaction-based activities. This rule would be managed jointly by the SEC, CFTC, and the Treasury Department. Furthermore, the act requires crypto exchanges and brokers to be classified as financial institutions. Consequently, these companies must follow strict anti-money laundering rules and verify the identity of their customers. To help companies grow, the bill introduces a fundraising exemption. This allows crypto firms to raise up to $50 million per year, with a total limit of $200 million, without registering with the SEC. This measure would reduce the SEC's ability to label token sales as illegal security offerings. Additionally, the act defines 'decentralization.' Platforms that do not meet this standard—such as those that can block users—will have to follow institutional reporting requirements. Regarding the tokenization of traditional assets, the bill emphasizes that moving securities to a blockchain does not remove existing laws. Therefore, tokenized assets must be treated the same as traditional ones. These rules have caused different reactions. The banking sector argues that stablecoin rewards could cause customers to move their money out of regulated banks. Meanwhile, labor organizations like the AFL-CIO and SEIU claim that digital assets could make public pensions and retirement accounts unstable, asserting that the law encourages too much risk.

Conclusion

The Senate Banking Committee will vote on whether to move the Clarity Act forward this Thursday, despite ongoing opposition from banks and labor groups.

Learning

🚀 Moving from Simple to Sophisticated: The Power of 'Logical Connectors'

At the A2 level, you likely use and, but, and because. To reach B2, you need to stop using these 'basic' bridges and start using Logical Connectors. These words tell the reader how two ideas relate to each other.

🧩 The 'Result' Bridge: From So $\rightarrow$ Consequently

In the text, we see: *"...classified as financial institutions. Consequently, these companies must follow..."

A2 style: They are financial institutions, so they must follow rules.
B2 style: They are classified as financial institutions; consequently, they must follow rules.

Why it matters: Consequently signals a formal cause-and-effect relationship. It makes you sound professional and precise.

🧩 The 'Addition' Bridge: From Also $\rightarrow$ Furthermore / Additionally

Look at how the author adds new information:

*"Furthermore, the act requires..."
*"Additionally, the act defines..."
A2 style: The law does this. Also, it does that.
B2 style: The law does this. Furthermore, it requires that...

Pro Tip: Use Furthermore when the second point is more important than the first. Use Additionally when you are just adding another item to a list.

🧩 The 'Contrast' Bridge: From But $\rightarrow$ Despite / Although

Check out this sentence: *"...although it allows rewards for transaction-based activities." And the conclusion: *"...despite ongoing opposition from banks..."

A2 style: Banks hate the law, but the committee will vote.
B2 style: The committee will vote despite ongoing opposition from banks.

The B2 Secret: Despite is followed by a noun (opposition), not a full sentence. This shift in grammar is exactly what examiners look for when moving a student from A2 to B2.

🛠 Quick Reference Guide for your writing:

A2 (Basic)	B2 (Sophisticated)	Use it for...
So	Consequently / Therefore	Results
Also	Furthermore / Additionally	Adding info
But	Although / Despite	Contrast

Vocabulary Learning

legislative (adj.)

Relating to a law or laws, especially the process of making laws.

Example:The new legislative proposal aims to regulate digital assets more clearly.

proposal (n.)

A plan or suggestion put forward for consideration or discussion.

Example:The committee presented a proposal to standardize cryptocurrency regulation.

regulate (v.)

To control or supervise something by rules or laws.

Example:The act seeks to regulate how digital assets are managed.

cryptocurrencies (n.)

Digital or virtual currencies that use cryptography for security.

Example:Cryptocurrencies like Bitcoin and Ethereum are the focus of the new law.

standardize (v.)

To make something conform to a common standard or rule.

Example:The bill proposes to standardize how stablecoin rewards are treated.

stablecoin (n.)

A type of cryptocurrency designed to have a stable value, often linked to a fiat currency.

Example:Stablecoins can act like bank deposits, which the bill seeks to regulate.

decentralization (n.)

The process of distributing power or authority away from a central point.

Example:The act defines decentralization as a key feature for blockchain platforms.

tokenization (n.)

The conversion of an asset into a digital token that can be traded on a blockchain.

Example:Tokenization of traditional assets does not remove existing laws.

blockchain (n.)

A distributed digital ledger that records transactions across many computers.

Example:Moving securities to a blockchain requires careful regulatory oversight.

institutional (adj.)

Relating to large organizations or institutions, especially financial ones.

Example:The bill imposes institutional reporting requirements on crypto platforms.

exemption (n.)

A permission to be exempt from a rule or requirement.

Example:The fundraising exemption allows firms to raise money without SEC registration.

opposition (n.)

Strong disagreement or resistance to an idea or proposal.

Example:Opposition from banks and labor groups continues despite the bill's progress.