In Clarity Act news, Coinbase’s Chief Legal Officer, Paul Grewal, and Chief Policy Officer, Faryar Shirzad, weighed in on each other. Approved the Digital Asset Market Clarity Act, Commonly referred to as the Stablecoins for Payment Clarity Act, or CLARITY, it formulates a coordinated public defense of privately issued payment stablecoins while calling on Congress to create a legal framework that would limit the SEC’s power to pursue enforcement-based cryptocurrency regulation.
This is not just lobbying through exchanges with commercial interests in the stablecoin infrastructure. It is a deliberate attempt to use the legislative architecture to permanently redefine the regulatory boundaries between the SEC and the nascent stablecoin market, shifting the locus of authority from the federal courts, where case-by-case outcomes remain reversible, to legislation, where they do not.
The payment arrives against the backdrop of a specific lawsuit. The SEC has confirmed, through successive enforcement actions, that a broad class of digital assets qualify as securities under the Howey Test, a position that Coinbase has directly disputed in its ongoing legal action with the agency.
“Private” money is no more inherently risky than health care, security, or private transportation. What is important is how those risks are managed, as well as access and oversight. CLARITY promotes all of this. https://t.co/1aYRA0FTOp
– Paul Grewal (@iampaulgrewal) May 25, 2026
Grewal, who has made criticism of regulation by enforcement a consistent theme in his public comment, is now pushing the argument that favorable judicial rulings alone are insufficient, and that only congressional authorization can provide the durable rating certainty that institutional participants need before deploying capital broadly into dollar-denominated digital assets like USDC.
We believe the timing of this coordinated advocacy push is not incidental to Coinbase’s litigation position. A legal framework that explicitly removes payment stablecoins from the SEC’s jurisdiction would not only benefit Coinbase’s policy preferences — it would materially weaken the evidentiary basis for the SEC’s broader enforcement theory by establishing, as a matter of federal law, that stablecoin instruments are not investment contracts. This result is more valuable to the stock exchange than winning any single case.
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Clarity Act News: Stablecoin Payment Clarity Act, what the bill says and why the gap in SEC enforcement matters
The Digital Asset Market Clarity Act, in its current form on the Senate floor, represents the most comprehensive federal attempt to date to establish a supervised path for payment stablecoin issuers operating within the United States.
The bill works alongside the U.S. Stablecoins National Innovation Guidance and Establishment Act, known as the GENIUS Act, which was signed into law in July 2025 and established the reserve and disclosure baseline that CLARITY now seeks to expand across the broader digital asset market structure.
Together, the two tools form the legislative scaffolding that Coinbase executives say makes bank-equivalent regulation unnecessary and analytically incoherent when applied to stablecoin issuers.
piece of @greg_ip in @Wall Street Journal Today he wonders whether stablecoins pose a risk to the economy because they are “private money.” It’s a fair question, but the framework goes beyond how the US monetary system actually worked for 160 years.
“Private money” is not the exception in our lives… pic.twitter.com/gXeqLwiLmP– Faryar Shirzad 🛡️ (@faryarshirzad) May 25, 2026
The mechanism works as follows: Under the GENIUS framework, issuers of payment stablecoins are prohibited by law from making loans, engaging in maturity transfers, operating leverage, or holding fractional reserves. Instead, they are required to maintain a single backing of all tokens in cash and short-term US Treasuries, submit them to monthly reserve certificates, and provide real-time cross-chain visibility into the reserve composition.
Shirzad explained this structural distinction directly: “Banks are organized this way because of what banks do: lend, shift maturities, run leverage roughly 10:1, and create credit. Genius issuers can do none of these things. By law, they hold cash and short-term U.S. Treasuries at a 1:1 ratio against claims on demand. There are no loans.”
A CLARITY system would expand this architecture to include market structure, while addressing the regulator – the SEC or CFTC – which has primary jurisdiction over digital asset classes, and creating a registration and compliance system for exchanges and brokers. The Senate Banking Committee was moving the bill toward a full vote, although the Senate must still reconcile its version with the text approved by the House of Representatives.
Prediction market participants have priced passage odds at roughly 50%, according to recent PolMarket data, reflecting real uncertainty about whether the Senate will be able to clear its procedural calendar before a November deadline that closes the remaining legislative windows before the midterm elections.
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Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to provide accurate and timely information but should not be considered financial or investment advice. Since market conditions can change rapidly, we encourage you to verify the information yourself and consult with a professional before making any decisions based on this content.
Daniel Francis is a technical writer and Web3 educator specializing in macroeconomics and DeFi mechanics. A crypto native since 2017, Daniel brings his background in cross-chain analytics to author evidence-based reports and detailed guides. It is certified by the Blockchain Council and is dedicated to providing “information gain” that cuts through the market noise to find blockchain’s real-world utility.
