Key facts
- The Senate version of the CLARITY Act would permit 11 crypto activities for US banking organizations and credit unions, including digital asset underwriting and dealing.
- The House-passed CLARITY Act allows banks to use digital assets or blockchain for any activity already permitted by law.
- The GENIUS Act, enacted in July 2025, permits stablecoin issuance, custody, and related activities for bank subsidiaries.
- The Senate failed a cloture vote on September 15, stalling the CLARITY Act.
- Banking groups and New York legal associations opposed the CLARITY Act, citing deposit-flight risk and concerns that underwriting language exceeds prudent banking principles.
A nonpartisan Congressional Research Service (CRS) report released September 30, 2026, has reignited the debate over allowing U.S. banks and credit unions to engage in crypto activities. The report analyzes the Senate version of the CLARITY Act (H.R. 3633), which proposes to formally permit 11 categories of crypto activities, including digital asset underwriting and dealing, for all U.S. banking organizations and credit unions.
The Senate's proposed text is broader than the House-passed bill, which allows banks to use digital assets or blockchain for any activity already permitted by law. The Senate version does not distinguish between "business of banking" and "financial in nature" activities, enabling insured depository institutions and credit unions to directly engage in the defined crypto activities. CRS notes that this scope, particularly digital asset underwriting and dealing, exceeds current capabilities in analogous traditional securities markets. Senator Cynthia Lummis has advocated for this broader framing, suggesting it would lead to a significant increase in Bitcoin prices.
Meanwhile, the GENIUS Act (P.L. 119-27), signed into law in July 2025, has already advanced the regulatory landscape by permitting stablecoin issuance, custody, and related activities for bank subsidiaries. This act has an effective date set for the earlier of January 18, 2027, or 120 days after final rules are issued. The Federal Reserve has begun the rulemaking process for stablecoin issuers under this framework.
Despite the potential for expanded crypto access, the CLARITY Act faces significant hurdles. The Senate failed a cloture vote 49-50 on September 15, halting its progress. Banking groups and New York legal associations have voiced opposition, citing risks such as deposit flight if stablecoin accounts offer yields and concerns that the underwriting language exceeds prudent banking principles. The CRS report echoes these safety-and-soundness questions, listing pseudonymity, market volatility, collateral risk, and deposit-insurance moral hazard as unresolved issues.
Credit unions face additional constraints, as the National Credit Union Administration (NCUA) has not finalized its rules for stablecoin issuance through credit union service organizations (CUSOs), and a 1% investment cap limits smaller institutions. Concurrently, regulatory bodies like the SEC and CFTC have pursued their own crypto rule-making, with nine separate actions already taken. This parallel regulatory track could influence future legislative efforts. Firms like Revolut are also pursuing bank-level permissions through existing regulatory pathways, as evidenced by its conditional OCC approval for a national bank charter. Citi has identified the CLARITY Act's setback as a market headwind, despite raising its 12-month Bitcoin price target.