The U.S. Senate Banking Committee advanced the Digital Asset Market Clarity (CLARITY) Act with bipartisan support (Senate Banking Committee) in May 2026. However, the legislation failed to advance in the full Senate on September 15 after a procedural vote fell short of the 60 votes needed to move forward. The setback leaves the legislation’s path to becoming law uncertain, while broader questions around the regulation of digital assets and stablecoins remain active in Washington.
What Is the CLARITY Act?
The CLARITY Act is proposed U.S. legislation that would establish a comprehensive regulatory framework for digital assets, bringing greater clarity to how stablecoins and other digital assets are regulated and fit within the broader U.S. financial system.
One of the most closely watched developments in the revised legislation is a compromise on stablecoin rewards. In simple terms, the revised language would mean that if someone is just holding stablecoins in an account without using them, they would not be able to earn interest or passive returns on that balance—similar to how a savings account earns interest. However, rewards would still be allowed if they are tied to actual activity, such as making payments, completing transactions, or participating in loyalty programs. Regulators would also be directed to issue guidance within one year clarifying where activity-based rewards end and prohibited interest begins (Galaxy Digital Research). Because the legislation did not advance in the Senate, these provisions are not current law.
Why It Matters to Financial Institutions
For financial institutions, the immediate impact is less about stablecoin rewards themselves and more about regulatory certainty—particularly as digital assets begin to intersect more directly with core payments infrastructure.
For years, uncertainty around digital asset regulation has slowed adoption and complicated strategic planning. The CLARITY Act was intended to help define how digital asset activities will be supervised, how responsibilities will be divided among regulators, and how stablecoins can coexist alongside traditional banking products.
The compromise also reflects how policymakers have sought to encourage innovation in digital payments without allowing stablecoins to function as interest-earning deposit accounts. As stablecoins increasingly resemble payment instruments rather than speculative assets, financial institutions will need to consider how these instruments could be integrated into existing payment ecosystems—particularly within unified payments hubs that orchestrate multiple payment rails, formats, and settlement mechanisms.
What Financial Institutions Should Consider
Although the legislation did not advance in the Senate,, institutions should begin evaluating how regulated digital money could fit into their long-term payments strategy and infrastructure modernization efforts.
Areas worth monitoring include:
- How future guidance distinguishes allowed rewards from prohibited interest, and how that affects product design and customer offerings.
- The evolving role of stablecoins in domestic and cross-border payments, particularly as an additional rail alongside ACH, the RTP® network, the FedNow® Service, and card networks.
- How unified payments hubs can be extended to support digital asset transactions, enabling orchestration, routing, and settlement across both traditional and emerging payment types.
- Compliance implications, transaction monitoring, and reporting requirements for stablecoin-based payments within existing regulatory frameworks.
- Potential impacts on customer expectations for faster, programmable, and always-available digital payments.
Banks and credit unions need to be aware that digital assets are steadily moving into the regulated financial ecosystem rather than operating outside of it. This will require tighter alignment between payments operations, compliance functions, and technology platforms.
Looking Ahead
The CLARITY Act failed to advance in the Senate on September 15, falling short of the 60 votes needed to move the legislation forward. While the bill is not formally dead, its path to becoming law remains uncertain, particularly as Congress approaches the November midterm elections.
Regardless of the legislation’s ultimate outcome, the continued focus on digital asset regulation underscores the need for financial institutions to prepare for an evolving payments landscape. Flexible, future-ready payments infrastructure—such as unified payments hubs—can help institutions adapt to emerging payment types while maintaining strong compliance and governance controls.
Just learning about stablecoins? Learn more in Stablecoin 101: Empowering Banks and Credit Unions.
Alacriti’s centralized payment platform, Orbipay Payments Hub, provides innovation opportunities and the ability to make smart routing decisions at the financial institution to meet their individual needs. Financial institutions can take full ownership of their payments and control their evolution with TCH’s RTP® network, the FedNow® Service, Zelle®, Fedwire, ACH, and Visa Direct, all on one cloud-based platform. To speak with an Alacriti payments expert, please contact us at info@alacriti.com.
