Senate Targets January CLARITY Act Markup

Traders are already positioning around a renewed regulatory push. ETH is trading near $2,965, up about 0.3% on the day and roughly 5% over the past month; meanwhile, SOL is trading around $124, up about 1.4% on the day and 0.7% over the past month.

Key Provisions of the CLARITY Act

Staffers working on the CLARITY Act text state that the current draft keeps the CFTC in the lead for non‑security fungible tokens that meet trading and decentralization tests, while codifying an SEC regime for tokens that rely on ongoing managerial efforts and offer yield or revenue‑share features.

That split tracks how recent SEC enforcement complaints described named assets, but for the first time, it would place the test in statute instead of case law and speeches.

On DeFi, lobbyists who reviewed the December redline say the bill would treat front-end operators, order-routing interfaces, and fee-collecting DAOs as registrants, while leaving a safe harbor open for immutable, fee-free smart contracts with no upgrade keys.

Political Environment and Market Sentiment

Prediction markets are also mirroring rising expectations that lawmakers will break the deadlock this cycle. On Kalshi, contracts tied to the passage of a broad federal digital asset framework by mid‑2026 are trading at materially higher probabilities than in early Q4, with open interest increasing as the markup date looks to be officially confirmed.

Traders used those markets through 2023–2025 as an informal policy barometer during failed pushes on earlier House‑driven bills.

Banking Committee members from both parties, including senators who previously backed narrower market‑structure efforts, have told industry groups they want to avoid a repeat of prior cycles where the House passes a digital asset package that then dies in the Senate without a committee vote.

A clean markup that yields a bipartisan manager’s amendment would set up a path to 60 votes on the floor, but staff still expect aggressive amendments on DeFi custody, sanctions enforcement, and treatment of crypto‑native stablecoin rewards in retirement accounts.

“My colleagues and I in the House and Senate share the same goal: to provide 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 Senate Banking Committee, in a July 2025 discussion draft.

Additionally, the CLARITY Act debate doesn’t happen in isolation. ETH drew over $1.3 billion in fresh staking flows from institutional vehicles in late December, according to recent staking data and fund disclosures, while Solana continues to capture high-beta flows after a year where its market cap rebounded sharply from 2022 levels.

Those flows price in some probability that the next Congress delivers a workable regime instead of continued rule‑by‑enforcement.

Institutional Market Implications

For desks that run serious size in ETH and SOL, this markup functions as a binary policy catalyst rather than political theater.

A bipartisan CLARITY Act draft that survives the committee with a clear CFTC lane for sufficiently decentralized L1s, a knowable registration path for DeFi front-ends, and an explicit ceiling on “reward‑like” stablecoin yields reduces headline risk for Ethereum-centric yield strategies and Solana liquidity provisioning, and it makes it easier for large U.S. venues to list and margin a broader set of tokens.

If the session breaks down into party-line votes or pushes DeFi into a de facto unworkable regime, the trade flips: U.S. flows migrate further offshore, regulated venues lean into BTC plus a handful of blue chips, and the regulatory overhang discount on anything that looks like a revenue-share or staking derivative widens again.