Coinbase Global and the rest of the crypto industry got a big win on Thursday when a Senate committee approved a long-sought bill to clarify how digital assets are regulated. The bill has a long way to go before becoming law, but Democrats' support of the bill is a good sign for its path forward.

On Thursday afternoon, the Senate Banking Committee voted 15-9 to advance the so-called Clarity Act, a bill that, among other things, would place most crypto trading under the purview of the Commodity Futures Trading Commission.

Cryptocurrencies and crypto-tied companies, which had already risen Thursday, extended their gains after the vote. Early Thursday afternoon, Bitcoin had risen 3% in the last 24 hours to about $81,500, Coinbase jumped 7% to $215.90, and Bitcoin treasury company Strategy rose 6.4% to $189.49.

Coinbase and other trading platforms have fought for such a move for years. Company executives have said that it's a precursor to broader institutional adoption of crypto and could unlock trillions of dollars in assets flowing into Bitcoin and lesser-known tokens.

The bill has for the last few months been held up by a dispute between banks and crypto firms. Recently Coinbase and some other trading platforms have been paying yields to customers on so-called stablecoins, a type of crypto pegged to the dollar. Banks have argued that such arrangements could drain deposits and pushed to amend the bill to prohibit such yield payments.

Senators came to a compromise earlier this month to allow "rewards" payments when customers use crypto but not on idle deposits. Though bank executives say it's not enough and want something stronger, GOP lawmakers decided to move forward anyway.

The bill's advancement out of the committee was almost assured even before the hearing started. Republicans can approve the bill on a party-line vote, and Senate Banking Chair Tim Scott (R., S.C.) would not have scheduled the vote if he was not confident it would pass. But the real success for the crypto industry on Thursday was that two Democrats also voted in favor of the bill. To avoid a Senate filibuster, the bill needs support from at least seven Democrats when it comes to a vote in the full Senate.

Some otherwise crypto-friendly Democrats have said they would vote against the bill if it doesn't include an ethics provision to keep President Donald Trump and his family from making money off crypto. The Trump family has already made millions on such ventures, and the White House has argued that they don't present a conflict of interest.

The two Democrats who voted in favor of the bill — Sens. Ruben Gallego (D., Ariz.) and Angela Alsobrooks (D., Md.) — said their votes did not guarantee they would vote in favor of the bill on the Senate floor.

"If this is not resolved by time it reaches the floor...I am not afraid to vote no," said Gallego, pointing to the ethics provision specifically.

The positive committee outcome increases the chances that the Senate attempts to approve the bill before August. Even if that happens, it still needs to pass the House of Representatives before reaching Trump's desk. Realistically, all that must happen before the November midterm elections, when lawmakers' attention will turn to their own campaigns.

Thursday's vote is a huge step forward for the crypto industry's biggest legislative priority, but even a small hiccup could derail its path to becoming law.

Write to Joe Light at joe.light@barrons.com

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source: https://www.tradingview.com/news/DJN_DN20260514007457:0/