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The Senate Banking Committee advanced the Clarity Act by a 15-9 vote, pushing the digital asset market structure bill closer to reality despite an aggressive lobbying campaign from labor unions, Wall Street, and law enforcement. Industry advocates see the act as a chance to shift oversight of billions in tokenized products from the Securities and Exchange Commission (SEC) to the CFTC—a win that could reshape the market’s regulatory future.
Why Labor Unions Are Now Crypto’s Biggest Opponents
labor groups—the AFL-CIO, Service Employees International Union (SEIU), American Federation of Teachers (AFT), National Education Association (NEA). The American Federation of State, County and Municipal Employees (AFSCME)—have emerged as vocal opponents to the Clarity Act. The unions sent coordinated letters to the Senate Banking Committee ahead of the May markup, explicitly warning that giving crypto markets new legitimacy could destabilize pension assets and threaten the financial security of public employees.
Introducing choppy cryptocurrencies into retirement portfolios places the savings of teachers, health workers, and other public servants at greater risk if prices fall sharply. Bitcoin Magazine details how the AFL-CIO’s letter argued that “poorly regulated crypto assets are uniquely susceptible to manipulation and fraud.” The unions launched an outreach campaign targeting moderate Democrats, warning that constituents’ retirement accounts could face new threats if the bill opens doors for crypto investments within pension plans.
🚨 THE WHITE HOUSE HAS SET A MARCH 1 DEADLINE TO MOVE THE CRYPTO MARKET STRUCTURE BILL FORWARD.
— Bull Theory (@BullTheoryio) February 20, 2026
The core issue has now been decided, and it goes against crypto firms and stablecoin holders: no yield on idle balances.
Today’s meeting was led directly by the White House, which… pic.twitter.com/Ni4eLk1XAd
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Primary labor unions publicly opposed the bill
Retirement and pension accounts comprise a important portion of managed capital in the United States. Labor’s fear is that a poorly governed crypto regime could spark a market event that undermines member benefits. The unions’ stance has rallied other coalition partners in the opposition bloc, including major law enforcement and consumer protection groups, creating a formidable resistance to quick regulatory change.
Crypto Industry Is Pushing A Bill To Tilt Regulation: The 20% Rule That Could Reshape Token Governance
The Clarity Act has introduced an explicit 20% cap for both project insider voting power and insider token ownership—two measures designed to settle the recurring debate around decentralization. Any crypto project where founders, developers, or insiders control more than 20% of governance participation or hold more than 20% of the circulating token supply is barred from CFTC oversight and must remain under the stricter regulatory framework of the SEC.
Industry groups have argued for years that a bright-line rule is necessary to distinguish decentralized protocols from those dominated by a central team. According to Bitcoin Magazine, as reported in “The Importance of Decentralization: A Deep Dive into Regulatory Perspectives,” this 20% rule functions as a gatekeeper: only networks judged sufficiently decentralized qualify for lighter-touch CFTC oversight. The “20% rule” echoes concerns from Ethereum’s early days, when debates over what constitutes “sufficient” decentralization shaped SEC enforcement decisions.
Major stablecoin projects, DeFi protocols, and Layer 1 blockchain startups would all face explicit constraints.
Wall Street’s Opposition to the Clarity Act
Banking and Wall Street trade groups have mounted visible resistance to the bill—especially over stablecoin and deposit implications. ABA CEO Rob Nichols wrote to bank executives on May 10 warning that a provision restricting stablecoin firms from paying interest or yield on payment stablecoins poses a fundamental threat to regulated banks’ business models. Banks argue that barring them from issuing interest-bearing stablecoins while allowing non-bank crypto firms to compete puts legacy depositories at a regulatory disadvantage and puts deposit funding at risk.
Regulated banks fear the Clarity Act would allow stablecoin providers to absorb customer balances with less oversight, draining the liquidity that underpins lending, capital allocation, and money market operations.
Banks have turned to both lobbying and public campaigns aimed at persuading moderate senators to demand tighter restrictions or block the legislation outright. Bitcoin Magazine reports that the bill’s creation of a new class of regulated but non-bank financial institutions. Not subject to the same Federal Reserve or FDIC regimes—could accelerate the rise of digital-native competitors.
Wall Street’s campaign against the Clarity Act has found unlikely allies in law enforcement and labor, all fearful that rapid structural change could spark holes in oversight or amplify systemic risk.
Ending the SEC-CFTC Regulatory Territory War
The Clarity Act sets out to resolve the long-running turf war between U.S. regulators that has left the crypto sector in a cloud of legal uncertainty. The bill draws a statutory line: assets and protocols meeting the decentralization standard—including the 20% insider rule—fall under CFTC jurisdiction, while the rest remain within the SEC’s remit. The SEC’s longtime use of the Howey test has resulted in aggressive enforcement actions. The CFTC has claimed authority over trading of digital commodities like Bitcoin and Ethereum futures.
With the Clarity Act, Congress is seeking to bring evident primary responsibility to the CFTC for most blockchain protocols that aren’t highly centralized.
John Lothian News reports that the Clarity Act’s strategy would allocate primary regulatory supervision: CFTC for networks meeting decentralization benchmarks, SEC for those with too much insider control or permissioned architecture.
Market participants have routinely cited the threat of retroactive enforcement as a deterrent to growth in the sector. By crystallizing a legislative definition of commodity versus security for digital assets, the Clarity Act aims to turn a years-long, agency-level fight into a standardized framework.
The Stablecoin Yield Fight That Nearly Derailed the Vote
The most divisive debate during the Banking Committee’s markup came over stablecoin yields. Democratic members proposed an amendment that would have let licensed stablecoin issuers pay yield—similar to interest on cash—provided they disclosed baseline risks and maintained minimum reserves. Tim Scott, a lead Republican, blocked the amendment, arguing it opened the door for regulatory arbitrage and reintroduced the threat of unregulated “shadow banking” outside the FDIC system.
Stablecoin sponsors and tech advocates claimed that allowing yield would let digital dollars compete with high-yield savings and money market accounts. But banks warned the step would trigger a enormous outflow of deposits from regulated financial institutions, increasing systemic risk, and transferring trust to digital issuers subject to less scrutiny. Cnbc reports consumer advocates argued on both sides, either favoring higher returns or warning against introducing bank-like products into an emerging and loosely regulated asset class.
When the committee finally voted, Democratic Senators Ruben Gallego (Arizona) and Angela Alsobrooks (Maryland) crossed party lines, joining thirteen Republicans for a final tally of 15-9 in favor of advancing the bill. The split highlighted the mounting electoral and policy risks for lawmakers caught between competing advocacy groups. Bitcoin Magazine notes stablecoin provisions could yet prove a sticking point in negotiations between the House and Senate, given their central role in the banking model.
The battle around stablecoin yields has also spotlighted the relative weakness of bipartisan middle ground on crypto. Legislative drafting in this sector remains intensely polarized, with each amendment sparking coordinated lobbying pressure. As the Clarity Act advances, even minor amendments carry enormous real-world consequence for investors, institutions, and the future regulatory template for digital assets.
The Senate Floor Battle That Lies Ahead
Now that the Banking Committee has moved the Clarity Act forward, the attention shifts to the full Senate—where the stakes are even higher. This upcoming floor vote is being characterized as a historic test for federal crypto regulation. Moderate Democrats now represent the swing bloc, having absorbed sustained lobbying not just from the tech sector but also from labor groups, Wall Street firms, and law enforcement associations. The House previously passed a separate version of the bill in autumn, but major differences remain to be reconciled around stablecoin oversight and the boundaries of CFTC jurisdiction.
JUST IN: Senator Bill Hagerty confirms the Clarity Act is scheduled to be presented to the Senate Banking Committee next week https://t.co/NFsjGXWGUB pic.twitter.com/4V8PTB64rt
— crypto.news (@cryptodotnews) April 12, 2026
The industry has made the Clarity Act its top legislative priority this year. Tech founders and venture investors see passage as transformative for U.S. blockchain innovation, while opponents have doubled down on warnings about systemic risk and regulatory fragmentation. Bitcoin Magazine reports lawmakers now face an extraordinarily polarized atmosphere, with lobbyists working overtime to shape the handful of votes likely to decide the bill’s future.
The 15-9 committee split—with only two Democrats joining thirteen Republicans—signals that a full Senate vote will be anything but predictable.
With heightened scrutiny from consumer watchdogs and the financial press, the coming weeks will bring relentless analysis and political calculation. CNBC reports Senate leadership is weighing the Clarity Act against other legislative priorities. As the debate unfolds, both sides are likely to propose amendments that could soften or further harden regulatory positions. The balance of power—and crypto’s ultimate legal footing in the U.S.—will depend on whether swing-vote senators align with labor, the financial sector, or the fast-advancing technology lobby.
For deeper analysis, background, and ongoing updates, visit the Regulation analysis and forecasts page. You can also track expanded coverage on crypto policy developments and upcoming market trends for the latest procedural timelines.
Sander Lutz is a crypto journalist and contributor at Token Liberty Times (tlt.ng), specializing in crypto policy reporting from Washington D.C.
Current Role: Senior Writer at Decrypt | Contributor at Token Liberty Times
Experience: 5 years in crypto journalism
Expertise: Crypto Policy, Regulation, Washington D.C., Political Risk
Previous Workplace: Decrypt
Credentials: Medill School of Journalism, Northwestern University
Social Links:
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Focus: Federal regulatory developments, White House-related crypto news, and crypto intersection with politics and law.
