LIVE: Senate Banking Committee holds key hearing to advance Clarity Act

Senator Cynthia Lummis, the Wyoming Republican who said she was a Bitcoin champion even before entering the Senate, thanked a number of lawmakers for their efforts on the bill. She framed the bill as being a bipartisan effort, giving shoutouts to Senators Ruben Gallego, Mark Warner and Angela Alsobrook as well as Republican Senators Bernie Moreno, Thom Tillis and John Kennedy.

“This is the hardest piece of legislation I’ve ever worked on,” she said, reiterating a claim she made last year. “This is a very new commodity and security, and it takes time to craft something to address the innovation that has been brought about through blockchain technology and that’s why it’s taken such a bipartisan effort, heavy lift, lots of negotiations, involvement from those people who are in the industry.”

She argued the bill is pro-consumer, addresses law enforcement concerns and otherwise meets the concerns Warren laid out earlier.

“It provides a woman who’s trying to get out of a battered, miserable marriage the opportunity to walk away with her money in her head,” she said. “It provides people who are being tortured in foreign countries the opportunity to walk away from that country with their money in their head, because Bitcoin can be memorized.”

There was a bit of a bizarre back-and-forth between Senators Scott and Warren before the actual hearing kicked off. Scott replied to Warren’s opening by saying that he had sought to “make sure both sides had an opportunity” to bring amendments, and that he had thrown out amendments proposed by both parties, in response to Warren’s suggestion that the bill is largely bipartisan and leaves holes in issues Democrats wanted plugged.

“We will disagree on this today, but I hope that what we end up with is a legislative product that is good now and gets another bite at the apple as it heads to the floor. This is not over, and I hope that no one thinks that this is over. This process has been transparent. It has been hard and it has been clear, and that’s good news for the American people who are watching this process,” Scott said.

Senator Catherine Cortez Masto asked why some of her proposed amendments were thrown out, but some of the response was not caught on the microphone.

Senate Banking Committee Chairman Tim Scott opened the hearing almost exactly on time, saying the bill would keep innovation in the U.S. by updating “outdated rules.”

“Safeguarding our national security means closing the doors that criminals, terrorists and hostile regimes have tried to exploit. This bill strengthens anti money laundering and sanctions rules and gives law enforcement better tools to go after bad actions. These tools make it harder to hide and easier to enforce the law. None of this happened overnight,” he said, arguing that both parties had negotiated agreements on the various provisions on the bill.

“This is what good governance looks like today,” he said.

The Senate Banking Committee is holding its markup hearing for the Digital Asset Market Clarity Act — more commonly known as just the Clarity Act — on Thursday, kicking off a key process for the long-awaited market structure bill.

Over the course of Thursday’s hearing, the 24 Senators on the committee will debate and vote on dozens of proposed amendments to the text released past midnight Tuesday morning. Ultimately, the lawmakers will vote on whether or not to advance the bill to the full Senate.

The bill still has a lengthy journey to becoming a law; if the Banking Committee does advance the bill, it will have to be merged with the Senate Agriculture Committee version of the legislation, debated and voted on the Senate floor, reconciled with the House of Representatives’ version of the bill and voted on in that chamber of Congress before it can go to the president’s desk.

Lawmakers are moving ahead with Thursday’s vote after finding a compromise on stablecoin yield they found acceptable. Senators Thom Tillis (R-N.C.) and Angela Alsobrooks (D-Md.) negotiated the agreement, circulating text at the beginning of the month. Outstanding issues include whether the bill will ultimately include an ethics provision barring senior government officials from having business ties to the crypto industry. According to a survey commissioned by CoinDesk, 73% of Americans believe senior government officials should not have business ties to the industry, referring to senior officials at large. The impetus for including such a provision in the bill is President Donald Trump and his family’s ties to World Liberty Financial and other cryptocurrency businesses.

And while lawmakers have come to a compromise on stablecoin yield, the banking industry as a whole maintains that the stablecoin yield provisions are still too tilted toward the crypto industry. State bank organizations have filed letters to lawmakers, and bankers themselves have sent some 8,000 letters to Senators, a source familiar said.

CoinDesk will be covering the hearing live as the lawmakers work through the hearing.