U.S. Senate Slow-Walks Clarity Act as Wall Street Moves Faster on Retail Crypto

May 4 — The White House said it wants Congress to deliver the Clarity Act to the president's desk before July 4. The cryptocurrency market structure bill cleared the House in July 2025 by 294–134, but has sat in the Senate for nearly a year. Sen. Tim Scott's Senate Banking Committee has set an internal deadline to finish markup in May, with leadership eyeing a full Senate vote in June or July. A key sticking point is an "ethics clause" pushed by Democratic lawmakers that would bar senior government officials from personally profiting from crypto assets while in office—language widely viewed as aimed directly at the president. May 6 — Morgan Stanley's E*Trade opened spot trading in Bitcoin, Ethereum and Solana to 8.6 million retail clients, charging a 0.50% fee. BeInCrypto said it is currently the lowest retail crypto fee among mainstream Wall Street brokers. The timing underscores a broader shift: even without final legislative clarity, traditional brokerages moved aggressively between April and May 2026, pushing retail trading fees to new lows. Fee compression, in context - Feb. 22, 2018: Robinhood becomes the first major retail online broker to offer crypto trading, advertising zero commissions (including spreads). - 2018: Coinbase rolls out its retail app, charging 0.99%–2.99% plus a 0.5% spread. - 2022: Coinbase launches Advanced Trade, lowering fees to 0.40%–0.60%. - 2023: Fidelity Crypto launches with a 1% fee. - Early April 2026: Charles Schwab launches Schwab Crypto, gradually opening spot BTC and ETH trading at 0.75%. - May 6, 2026: E*Trade follows with 0.50% for BTC, ETH and SOL. The gap is meaningful. Coinbase's standard app typically totals about 1.5%–3.5% once the 0.5% spread is included, while E*Trade's 0.50% brings costs to roughly one-third of that. Fidelity's 1% stands out as the priciest among major peers. Coinbase Advanced Trade remains competitive on headline pricing but is positioned more as a pro interface than the default on-ramp for typical retail users. Why April–May 2026 became the launch window Two developments helped clear the runway. First, the GENIUS Act—a stablecoin regulatory framework—was signed into law in July 2025, giving traditional financial institutions a clearer pathway for stablecoin custody and settlement. Second, the Clarity Act entered the Senate's markup pipeline, reducing fears of regulatory backlash after launch even if the final bill remains uncertain. In practice, Wall Street appears to be acting on the probability of passage rather than waiting for a final signature. The ethics clause: the political pressure point Democratic lawmakers have repeatedly sent ethics language to the White House since 2025, and it has repeatedly been rejected. The dispute is tied to the scale of the president's family exposure to crypto. Bloomberg reported in January 2026 that roughly one-fifth of the Trump family's $6.8 billion fortune is tied directly to crypto projects. Realized cash flow is estimated at about $1.47 billion, mainly from four sources: - World Liberty Financial (WLFI) token sales: about $1 billion in profits as of December 2025, including $550 million raised in the public offering - $TRUMP memecoin: launched three days before the January 2025 inauguration; about $362 million in fees and trading profits - $MELANIA memecoin: about $65 million - USD1 stablecoin reserve interest: about $42 million Unrealized value is estimated at about $2.8 billion. WLFI carries $1.5 billion in unsold tokens, a figure sensitive to WLFI price moves. FinanceFeeds estimated Trump Media's Bitcoin reserves at 9,500–11,500 BTC, worth about $840 million at current prices. The USD1 business and equity stakes including American Bitcoin Mining are valued at about $460 million. Combined realized and unrealized exposure totals roughly $4.3 billion. The version backed by Sen. Elizabeth Warren and others states: "Prohibit current senior officials from personally profiting from cryptocurrency assets during their tenure." A watered-down compromise was transmitted to the White House and then returned. Whether the bill reaches a Senate floor vote with this provision may come down to how many senators are willing to publicly support language that would directly curb the president's family's estimated $4.3 billion stake. What the Clarity Act would do The bill would sort digital assets into three categories: 1) "Digital commodities" overseen by the CFTC, including tokens operating on "mature blockchain systems." The bill defines "mature" with two requirements: full functionality and consensus, plus sufficient decentralization such that no single entity can unilaterally change protocol or governance. 2) "Investment Contract Assets" overseen by the SEC, including tokens that represent equity, debt or similar rights—such as tokenized stocks, on-chain traditional securities and certain RWA (real estate, notes, accounts receivable). 3) Payment stablecoins overseen by banking regulators, with requirements tied to capital, custody and anti-manipulation standards. Compared with FIT21, which stalled out in the Senate in 2024, the Clarity Act adds three notable changes: - Stablecoin treatment shifts from largely unspecified to venue-based: stablecoins traded on CFTC-regulated platforms fall under the CFTC; those on SEC-regulated platforms fall under the SEC, though the SEC would retain primarily anti-fraud authority. - DeFi relief shifts from a principles-based safe harbor to a specific list of exempt activities; operating a custodial front end, running a node and publishing code would not trigger registration. - Intermediary oversight shifts toward mandatory dual registration for firms dealing in digital assets, even if they are already SEC-registered broker-dealers. The bill's intent is to put an end to the industry's central regulatory uncertainty: who regulates what. A narrow path to becoming law Rep. French Hill's office has said more than 40 crypto and blockchain bills were introduced in the 116th Congress (2019–2020), with none enacted. FIT21 emerged in the 118th Congress (2023–2024), passed the House in May 2024 and then died in the Senate. On July 18, 2025, Trump signed the GENIUS Act, establishing a federal framework for payment stablecoins—the first, and so far only, crypto-related federal law enacted in six years. One day earlier, on July 17, 2025, the House passed the Clarity Act 294–134. With Senate markup now scheduled, the Clarity Act is effectively where FIT21 once was: House-passed and waiting on the Senate. The political backdrop has changed—the Trump administration is openly pushing for crypto legislation—but the ethics language remains a major obstacle and key Democratic lawmakers have not signed on. If the first week of August passes without action, the Senate is set to recess until Sept. 14. With midterm elections on Nov. 3, the odds of enactment in 2026 are no longer dictated solely by White House support. After more than 50 crypto-related bills introduced over six years and just one signed into law, the next two months may determine whether the Clarity Act becomes the second. Source: BlockBeats