Senate Panel Advances Clarity Act as Democrats Split

The Senate Banking Committee voted Thursday to advance the Clarity Act after Sen. Ruben Gallego (D-Ariz.) and Sen. Angela Alsobrooks (D-Md.) joined all Republican members in supporting the bill. The vote clears the legislation to move to the full Senate for consideration.

The Clarity Act would create a federal framework that recognizes and permits most cryptocurrency activity in the United States and sets definitions for how digital assets are treated under federal law. Committee support came from every Republican on the panel plus Gallego and Alsobrooks; the remaining Democrats on the committee voted against the measure.

Gallego and Alsobrooks had previously indicated they would withhold support unless negotiators agreed on language intended to limit any conflicts tied to President Trump’s personal crypto ventures. No such language was added before the vote, but both senators nonetheless backed the bill, providing the margin needed to advance it.

The hearing in Washington, D.C., featured discussion of the bill’s regulatory reach and the legal definitions it would impose. Backers of the measure said it would reduce uncertainty for businesses and investors by clarifying which crypto activities are lawful under federal law. Critics within the Democratic caucus raised concerns about oversight, consumer protections and potential market risks.

With committee approval, the Clarity Act moves to the Senate floor, where senators can debate and offer amendments. Passage by the full Senate, approval in the House and a presidential signature would be required for the bill to become law. Further negotiations over the text are likely as the measure advances.