Senate CLARITY Act Advances With Housing Provision as Democrats Demand Ethics Rules

Bipartisan Crypto Bill Includes Unexpected Housing Component

The latest version of the CLARITY Act, a significant piece of cryptocurrency market structure legislation, has emerged from Senate negotiations with an unexpected addition. Tucked into the final pages of the bill is the Build Now Act, a housing-related provision designed to establish a pilot program incentivizing housing development across participating Community Development Block Grant jurisdictions.

According to Senators Tim Scott, Cynthia Lummis, and Thom Tillis, the legislation represents "continued negotiations with Democratic colleagues," suggesting meaningful bipartisan collaboration ahead of Thursday's markup session.

Democratic Opposition Centers on Ethics Concerns

Despite progress on negotiations, significant hurdles remain. Some Senate Democrats, including Senator Kirsten Gillibrand, have stated they will not support the market structure legislation on the Senate floor without explicit ethics provisions addressing potential conflicts of interest.

Senator Angela Alsobrooks, a banking committee member who recently announced a stablecoin yield compromise with Tillis, expressed optimism to Cointelegraph. "We have worked too hard on this bill to give up now," Alsobrooks said. "My hope is to get to a bipartisan markup on Thursday with a compromise on ethics."

The ethics dispute centers on President Donald Trump's cryptocurrency ventures, including his memecoin and his family's World Liberty Financial business. However, lawmakers have not yet included any provisions addressing these concerns in the current bill text.

Senator Elizabeth Warren of Massachusetts issued a sharp rebuke of the legislation. "This bill puts investors, our national security and our entire financial system at risk – and it will turbocharge Donald Trump's crypto corruption," Warren stated. "In just one year in office, the President and his family have raked in at least $1.4 billion in gains from crypto deals alone, and yet this bill stunningly includes zero provisions to prevent that."

CFTC to Gain Expanded Digital Asset Authority

The CLARITY Act is designed to grant the Commodity Futures Trading Commission (CFTC) expanded authority over digital asset oversight and regulation, shifting responsibilities traditionally held by the Securities and Exchange Commission (SEC). This represents a fundamental restructuring of regulatory jurisdiction within the cryptocurrency sector.

The Senate Agriculture Committee approved its version of the legislation during a January markup. The bill must now clear the banking committee, pass the full Senate, and be reconciled with House of Representatives legislation before potentially reaching the President's desk for signature.

Stablecoin Yield Restrictions and Developer Protections

The legislation explicitly prohibits paying interest or yield on payment stablecoins, with one notable exception. The bill allows "rewards or incentives based on bona fide activities or bona fide transactions that are not economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit."

The CLARITY Act also incorporates language from the Blockchain Regulatory Certainty Act, proposed legislation aimed at protecting developers from money transmitter requirements. The DeFi Education Fund, an advocacy organization, expressed encouragement in a Monday post on X regarding "the direction of recent negotiations," specifically highlighting the software developer protections.

Path Forward Requires Bipartisan Support

While the Senate Agriculture Committee voted along party lines in January to advance the bill, passage through the full Senate requires 60 votes, necessitating bipartisan cooperation. Precedent exists for such collaboration: when the GENIUS Act, stablecoin payments legislation, was considered in June 2025, Democrats and Republicans joined forces to pass the bill with a 68-30 bipartisan vote.

The banking committee markup scheduled for Thursday will serve as a critical test of whether negotiators can bridge the ethics divide and maintain momentum for comprehensive cryptocurrency market structure reform.