Senate Sets January Markup for CLARITY Act as Traders Brace for DeFi Rules
The Senate Banking Committee is planning a January 15 markup of the long-discussed CLARITY Act, a digital asset bill that stalled in 2025 over disagreements about DeFi, token classification, and stablecoin yields. Senior staff briefings and the committee’s draft agenda shared with lobbyists show the bill is back on the table.
Traders are already reacting. Ethereum (ETH) is hovering around $2,965, up roughly 0.3% on the day, while Solana (SOL) trades near $124, up 1.4%. Over the past month, ETH is up about 5%, and SOL has gained 0.7%, suggesting investors are factoring in a potential regulatory breakthrough.
What the CLARITY Act Proposes
The current draft would keep the CFTC in charge of non-security tokens that meet trading and decentralization tests, while giving the SEC authority over tokens that rely on ongoing managerial effort or offer yields and revenue-sharing features. For the first time, this would codify the “security vs. non-security” test in law rather than leaving it to case law and agency guidance.
On DeFi, the bill would require registration for front-end operators, order-routing platforms, and fee-collecting DAOs. Meanwhile, truly decentralized, fee-free smart contracts without upgrade keys would enjoy a safe harbor.
Market and Political Context
Prediction markets show rising confidence that lawmakers could break the 2025 deadlock. Contracts tied to a federal digital asset framework passing by mid-2026 are trading at significantly higher probabilities than last quarter.
Senate Banking Committee members from both parties have emphasized avoiding the usual cycle where the House passes a bill that dies in the Senate. A smooth markup with a bipartisan manager’s amendment could pave the way for 60 votes on the Senate floor, though staff expect debates over DeFi custody, sanctions enforcement, and crypto-native stablecoin rewards in retirement accounts.
“We want clear rules of the road for digital assets that protect investors, foster innovation, and keep the future of digital finance anchored in America,” said Sen. Tim Scott, chairman of the committee, in a July 2025 draft discussion.
Implications for Traders and Institutions
For institutional desks running large ETH or SOL positions, the markup is a binary event:
If the bill passes cleanly with a clear CFTC lane for decentralized L1s, a knowable registration path for DeFi platforms, and limits on “reward-like” stablecoin yields, it would reduce regulatory uncertainty. This makes it easier for US venues to list tokens, margin positions, and support Ethereum- and Solana-based yield strategies.
If the bill breaks down or imposes restrictive DeFi rules, U.S. flows could move offshore, regulated venues would focus on Bitcoin and a few major coins, and any token resembling a revenue-sharing or staking derivative could carry a higher regulatory discount.
Meanwhile, ETH drew over $1.3 billion in institutional staking flows in late December, and Solana continues to capture high-beta activity after a strong 2025 rebound, showing that markets are already pricing in some chance of workable rules.
