The Senate Banking Committee has scheduled a markup of the Digital Asset Market Clarity Act for May 14, setting up the most consequential week for crypto regulation on Capitol Hill in months. The bill, commonly known as the CLARITY Act, would draw firm jurisdictional lines between the SEC and CFTC over digital assets.

Getting here required clearing a sticking point that had stalled negotiations for weeks: whether stablecoins should be allowed to offer yield to holders. Senators Thom Tillis and Angela Alsobrooks hammered out a compromise on the issue, removing what had been the single biggest policy obstacle to bringing the bill before the committee.

What the CLARITY Act actually does

The bill establishes which…