For the first time, the United States Senate is going to actually vote on what crypto is.
That sentence has been theoretical since 2014. On Thursday at 10:30 AM Eastern, it becomes literal. The Senate Banking Committee, chaired by Senator Tim Scott of South Carolina, will mark up the 309-page Digital Asset Market CLARITY Act, the first-ever committee vote on a comprehensive US crypto market structure bill. Whether the bill survives Thursday’s markup intact, gets amended into something unrecognizable, or stalls outright will determine whether the United States enters the back half of 2026 with a statutory crypto regulatory framework, or with the same SEC-versus-CFTC turf war it has been litigating for a decade.
For Bitcoin, the stakes are direct. For the broader institutional flow of capital into digital assets, the stakes are larger. And for the banking lobby that has been quietly trying to gut the bill in the final week, the stakes are existential.
What The Bill Actually Does
Strip away the 309 pages of statutory language and the CLARITY Act does three things.
First, it splits jurisdictional authority between the SEC and the CFTC along a defined line. Digital asset securities, primarily the offering-and-trading lifecycle of tokens that meet the Howey test, sit with the SEC. Digital commodities, including Bitcoin and a defined list of decentralized network tokens, sit with the CFTC. Payment stablecoins get a third, narrower lane that was largely resolved in the early-May stablecoin compromise that we covered in the context of the HawkEye 360 IPO reopening the institutional capital window.
Second, it codifies the joint interpretive guidance the SEC and CFTC issued in March 2026, which classified Bitcoin as a digital commodity. That guidance was an administrative action, which means any future SEC or CFTC chair could rescind it with a memo. The CLARITY Act converts the classification into federal statute, which means a future administration would need an act of Congress to undo it. For long-term BTC holders and ETF issuers, that is the single most important provision in the bill.
Third, it establishes a registration regime for digital asset exchanges, custodians, and broker-dealers, modeled loosely on the existing Commodity Exchange Act framework but with carve-outs for self-custody and decentralized protocols. The text of the bill is publicly available via Congress.gov, and the full markup language was unveiled by the Banking Committee on Monday.
The Politics On Thursday Morning
The House passed an earlier version of CLARITY in July 2025 with 294 votes, a margin that crossed party lines comfortably. The Senate path has been longer. Tim Scott took the chair gavel in January and has spent four months building the committee coalition. His stated timeline calls for a clean markup before the Memorial Day recess starts May 21, a full Senate floor vote in June, a House-Senate reconciliation in late June, and a presidential signature by the July 4 deadline the White House has been telegraphing for months.
That timeline survives Thursday if the markup advances without major amendments. It cracks open if the Democratic side of the committee, led by Senator Elizabeth Warren and Senator Sherrod Brown, succeeds in attaching amendments that strip the digital commodity classification or impose bank-like capital requirements on crypto exchanges.
The banking lobby spent the last ten days pushing hard for the second outcome. The American Bankers Association and the Bank Policy Institute issued a joint letter on Monday arguing that the CLARITY Act’s exchange registration regime would create “regulatory arbitrage” against insured depository institutions. Translation: the banks do not want Coinbase, Kraken, and Gemini operating under a CFTC-style commodity exchange framework while the banks themselves operate under a Federal Reserve framework with significantly higher capital and supervisory requirements.
That is a real concern. It is also exactly the kind of late-stage lobbying push that has killed previous crypto bills. The question Thursday is whether Tim Scott has the votes to hold the line or whether the Democratic amendments, possibly with one or two Republican defections, reshape the bill on the margin.
What The Market Is Pricing
Prediction market Polymarket put the implied probability of CLARITY Act passage in 2026 at 80 percent in early May, the day after the stablecoin compromise was announced. As of Thursday morning, that probability has slipped to 62 percent. The 18-point repricing reflects exactly the banking lobby pressure described above. The market is pricing in a non-trivial probability that the markup gets messy.
Bitcoin trades just under $80,000 ahead of the vote, down from a recent high near $84,000 and pressured by the April PPI inflation shock that hit broader risk assets on Wednesday. The crypto-equity correlation has tightened in the last 30 days, which is unhelpful for the bull case but also expected when the policy catalyst is binary.
Citi’s crypto strategy desk published a base-case framework in early April that ties a $143,000 2026 Bitcoin target directly to CLARITY Act passage, projecting an additional $15 billion in net ETF inflows once the bill clears Congress. The bear case in the same note, assuming CLARITY stalls, marks Bitcoin closer to $58,000 by year-end as institutional flows reverse. That is a $85,000 range outcome dependent on a single committee vote.
The Institutional Stack Behind The Vote
The other thing the market is watching is the institutional infrastructure that has built up around the assumption CLARITY passes. BlackRock and Fidelity have both filed for expanded spot crypto ETF products covering Solana, XRP, and a basket index, all of which are conditional on the SEC-CFTC jurisdictional split the bill codifies. Charles Schwab launched spot crypto trading for retail clients in early May. Morgan Stanley wealth management opened up crypto allocation guidance to advisors in March. State Street and BNY Mellon have custody products in soft launch.
None of those rollouts make commercial sense if the SEC-CFTC turf war remains unresolved. The institutions have effectively pre-built the rails for a post-CLARITY world. Thursday tells us whether the rails get used.
Watch The Amendments
Three amendments to watch on Thursday morning specifically.
The Warren amendment, expected from Senator Warren or one of her staff, would reclassify Bitcoin and Ethereum as digital asset securities rather than digital commodities, effectively undoing the March SEC-CFTC joint guidance. This is the nuclear option. It would not pass committee but the vote count tells us how much room the Democratic side has to maneuver on the floor.
The Brown amendment, expected from Senator Sherrod Brown, would impose a bank-like capital framework on digital asset exchanges with custody operations above $10 billion. This is the banking lobby’s preferred outcome. It has a real chance of passing if even one moderate Republican defects.
The DeFi carve-out amendment, expected from a Republican-led group, would expand the bill’s existing decentralized protocol exemption to cover self-custody wallets and on-chain governance tokens more broadly. If it passes, the crypto-native community wins a structural concession that was not in the House version.
The Read From Here
If the markup advances Thursday with the Tim Scott base text largely intact, the Polymarket implied probability snaps back toward 75 to 80 percent, Bitcoin retests $84,000, and the institutional ETF pipeline accelerates. If the markup gets gutted by the Warren and Brown amendments, the probability collapses toward 35 percent, Bitcoin tests $72,000 to $75,000 on the downside, and the entire 2026 institutional crypto thesis has to be rebuilt.
The base case is somewhere in between. The Tim Scott coalition has the votes to advance the bill but not without concessions on the bank capital question. Coinbase, Kraken, and the other exchange operators will spend Thursday afternoon reading the marked-up text very carefully and pricing in the operational cost of whatever they ended up with.
What matters is that we are finally getting an answer. Ten years of regulatory ambiguity ends, in one form or another, at 10:30 AM Eastern on Thursday. The market has been waiting for that for longer than most of its participants have been in the space.