Labor Unions and Banks Oppose Crypto Clarity Act Ahead of Senate Vote

A broad opposition coalition of labor unions and banking industry groups has mobilized against the Digital Asset Market Clarity Act ahead of a Senate Banking Committee markup vote scheduled for Thursday, May 14. Five of the nation's largest labor unions — the AFL-CIO, SEIU, AFT, NEA, and AFSCME — sent letters and emails to senators warning the legislation would expose workers' retirement savings and pensions to cryptocurrency volatility. The AFL-CIO separately cautioned that embedding cryptocurrencies into the real economy without sufficient regulation would destabilize markets, benefiting issuers at the expense of working people.

The American Bankers Association has joined the opposition, arguing that the bill's stablecoin yield provisions could trigger a flight of deposits from traditional banks. The crypto industry disputes this, contending the bill would restrict rather than expand such practices.

Committee Chairman Tim Scott released the 309-page bill draft, which establishes a three-category regulatory framework: digital asset securities under the SEC, digital commodities under the CFTC, and payment stablecoins under a mix of Federal Reserve and state supervision. A key compromise on stablecoin yields — negotiated by Senators Thom Tillis and Angela Alsobrooks — bans passive interest on stablecoin deposits unless the provider is a licensed bank but permits activity-based rewards such as cashback and staking incentives. The bill also incorporates DeFi developer protections and the unrelated Build Now Act housing provision to broaden support.

The legislation's biggest remaining obstacle is ethics. Democrats including Elizabeth Warren and Kirsten Gillibrand demand provisions addressing President Trump's crypto conflicts of interest, while Republicans reject targeting specific officeholders. Gillibrand stated she would not vote for the bill without an ethics provision barring officials from profiting through insider crypto industry status. The bill needs 60 Senate votes, making Democratic support essential. Crypto industry leaders, including Michael Saylor and Coinbase, champion the bill as necessary regulatory clarity that would validate digital assets as institutional-grade capital.