Senate Schedules January Review of the CLARITY Act – Traders Prepare for DeFi Changes

The Senate Banking Committee is aiming to arrange a markup on January 15 for the long-discussed CLARITY Act, reviving a comprehensive digital asset bill that was halted in 2025 due to disputes regarding DeFi, token classification, and stablecoin yields, as indicated by senior staff briefings and the committee’s draft agenda shared with lobbyists this week.

BREAKING NEWS:
U.S. LAWMAKERS ARE SETTING JANUARY 15 FOR A MARKUP OF THE LONG-ANTICIPATED MARKET STRUCTURE LEGISLATION, THE ‘CLARITY ACT!’
JANUARY 2026 WILL BE SIGNIFICANT FOR #XRP AND CRYPTO! https://t.co/XCpHivF3lC pic.twitter.com/7wCSGRExHk

— 𝓐𝓶𝓮𝓵𝓲𝓮 (@_Crypto_Barbie) December 31, 2025

Traders are already adjusting their positions in anticipation of a renewed regulatory initiative. ETH is currently trading at approximately $2,965, reflecting a rise of about 0.3% for the day and roughly 5% over the past month; in contrast, SOL is trading around $124, up about 1.4% for the day and 0.7% over the past month.

Key Provisions of the CLARITY Act

Staff members involved in drafting the CLARITY Act indicate that the current version maintains the CFTC’s leadership for non-security fungible tokens that satisfy trading and decentralization criteria, while establishing an SEC framework for tokens that depend on ongoing managerial efforts and provide yield or revenue-sharing features.

This division aligns with how recent SEC enforcement actions have characterized specific assets, but for the first time, it would codify the test into law rather than relying on case law and public statements.

Regarding DeFi, lobbyists who examined the December redline report that the bill would classify front-end operators, order-routing interfaces, and fee-collecting DAOs as registrants, while allowing a safe harbor for immutable, fee-free smart contracts without upgrade keys.

Political Environment and Market Sentiment

Prediction markets are reflecting increasing expectations that lawmakers will resolve the impasse this cycle. On Kalshi, contracts linked to the approval of a comprehensive federal digital asset framework by mid-2026 are trading at significantly higher probabilities than in early Q4, with open interest rising as the markup date appears to be officially confirmed.

Traders utilized these markets throughout 2023–2025 as an informal gauge of policy during unsuccessful attempts on earlier House-driven legislation.

Members of the Banking Committee from both parties, including senators who previously supported narrower market-structure initiatives, have communicated to industry groups their desire to prevent a recurrence of past cycles where the House passes a digital asset package that subsequently fails in the Senate without a committee vote.

A straightforward markup that results in a bipartisan manager’s amendment would pave the way for 60 votes on the Senate floor, but staff anticipate contentious amendments regarding DeFi custody, sanctions enforcement, and the treatment of crypto-native stablecoin rewards in retirement accounts.

“My colleagues and I in the House and Senate share the same goal: to provide clear rules of the road for digital assets that protect investors, foster innovation, and keep the future of digital finance anchored in America,” stated Sen. Tim Scott, chairman of the Senate Banking Committee, in a discussion draft from July 2025.

Furthermore, the debate surrounding the CLARITY Act does not occur in a vacuum. ETH attracted over $1.3 billion in new staking flows from institutional sources in late December, according to recent staking data and fund disclosures, while Solana continues to draw high-beta flows following a year in which its market cap rebounded significantly from 2022 levels.

These flows incorporate some expectation that the next Congress will establish a functional regulatory framework rather than continuing a regime of enforcement.

Institutional Market Implications

For desks managing substantial positions in ETH and SOL, this markup serves as a binary policy catalyst rather than mere political theater.

A bipartisan CLARITY Act draft that progresses through the committee with a clear CFTC pathway for sufficiently decentralized L1s, a defined registration process for DeFi front-ends, and a specific limit on “reward-like” stablecoin yields mitigates headline risk for Ethereum-centric yield strategies and Solana liquidity provisioning, facilitating larger U.S. venues to list and margin a wider array of tokens.

If the session devolves into party-line votes or forces DeFi into an impractical regime, the trade dynamics shift: U.S. flows could further migrate offshore, regulated venues may focus on BTC and a select few blue-chip assets, and the regulatory overhang discount on anything resembling a revenue-sharing or staking derivative could widen once more.

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