The Clarity Act has successfully passed the Senate Banking Committee, marking a significant milestone in U.S. crypto regulation. As reported by The Block, Sen. Cynthia Lummis confirmed both sides still agree on 99% of the bill despite bipartisan talks hitting roadblocks over ethics rules involving the First Family and protections for non-custodial crypto developers. Major industry names including Fidelity, Coinbase CEO Brian Armstrong, and David Sacks have publicly backed the legislation, with the bill expected to pass the committee likely along party lines. This development comes as stablecoin advocates continue pushing back against proposed restrictions under the legislation.
Senator Elizabeth Warren has issued a stark warning about the Clarity Act, stating that the legislation will 'blow up the economy.' According to Watcher.Guru, Warren argued that the bill 'pushes more of the economy into crypto' and 'pushes more of the economy into superior technology.' This represents a significant escalation in opposition from a prominent Democratic senator who has previously been critical of cryptocurrency. The warning comes as the Clarity Act faces intense debate over stablecoin rewards, with banking advocates leading opposition to the legislation.
Bitcoin is breaking from the cycle playbook that defined every prior peak, with on-chain data revealing structural changes in market dynamics. According to Glassnode, the MVRV Z-Score peaked near 3.5 in the post-halving run, sitting well below the 12, 11, and 7 readings that capped previous cycles in 2013, 2017, and 2021. As of May 14, 2026, the Z-Score sits close to 1, remaining silent through the entire move from 2022 lows. Exchange balances have declined steadily from above 3.3 million BTC in early 2022 to near 3 million BTC in May 2026, while Bitcoin reached $126,000 in October 2025 with falling float. Spot ETFs now hold approximately 1.3 million BTC, representing roughly 6.5% of circulating supply, with BlackRock's IBIT remaining the dominant fund.
The Clarity Act has stalled in the Senate due to intense debate over stablecoin rewards, with banking advocates leading the opposition. As reported by The Block, Joshua Riezman, Chief Legal and Strategy Officer at GSR, noted that the issue has emerged as a key sticking point. The banking lobby's primary concern centers on deposit flight, with organizations like the American Bankers Association and Bank Policy Institute sending letters to Senators Tim Scott and Elizabeth Warren urging changes to the legislation. These organizations argue that allowing crypto exchanges to reward users for holding stablecoins could cause deposit flight that would disrupt the U.S. banking system's ability to lend money.
The stablecoin market is experiencing significant growth, with projections suggesting it could reach trillions of dollars. According to The Block, Tether and Circle remain the two major issuers with their USDT and USDC tokens respectively. Major financial institutions are increasingly investing in stablecoins, with Wall Street firms including JPMorgan, Citigroup, and BlackRock participating in the space. Payment networks Visa and Mastercard are also involved in stablecoin development, while Bank of America's CEO has indicated the bank would likely issue its own stablecoin. As reported by The Block, Western Union and MoneyGram have both become involved in stablecoins as they see blockchain-based payment rails as a way to increase efficiency and reduce costs across their global remittance networks.
Industry leaders are challenging the banking industry's deposit flight concerns while facing new warnings about broader economic implications. According to The Block, Lehtiniitty argued that high-yield accounts from fintechs for years haven't caused a complete collapse of the U.S. banking system, questioning why stablecoin payments would be different. Collins from Borderless.xyz noted that "there's always going to be entrepreneurs trying to figure out that system to give the value to the consumers" because platforms need to attract more consumers. MoneyGram CEO Anthony Soohoo suggested that if stablecoins are treated like real currency, paying yield for holding them may become less controversial, as some countries are already assigning the same value to USDC as U.S. dollars. The latest warnings from Senator Warren add a new dimension to these debates, suggesting that the legislation could have broader economic consequences beyond traditional banking concerns. The Clarity Act's passage through the Senate Banking Committee represents a significant regulatory milestone, though the bigger fight will happen when the bill reaches the Senate floor.
