From GENIUS to CLARITY: Congress Weighs On-Chain Banking for US Depositories

A nonpartisan Congressional Research Service (CRS) report published September 30, 2026, has put the debate over bank-permissible crypto activities back in the spotlight.

The analysis details how the Senate version of the CLARITY Act (H.R. 3633) would formally add 11 categories of crypto activities, including digital asset underwriting and dealing, as permissible for all U.S. banking organizations and credit unions.

Crypto accounts amplified the finding on October 1, quickly framing it as a watershed moment for institutional adoption.

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What the Senate CLARITY Text Actually Proposes

The CRS document breaks down two distinct versions of the CLARITY Act with materially different scopes.

The House-passed bill allows banks to use digital assets or blockchain for any activity already permitted by law.

The Senate-reported text goes further. It does not separate “business of banking” from “financial in nature” activities.

Instead, it lets every insured depository institution and credit union engage in 11 defined crypto activities outright.

Among those activities is digital asset underwriting and dealing, a scope that, as CRS flags, exceeds what banks can currently do in analogous traditional securities markets.

Sen. Cynthia Lummis has argued this framing would let all U.S. banks freely buy and hold Bitcoin, calling it a supply shock that would push BTC prices “dramatically” higher.

The already-enacted GENIUS Act (P.L. 119-27), signed into law in July 2025, had already moved the needle, making stablecoin issuance, custody, and related activities permissible for bank subsidiaries, with an effective date set for the earlier of January 18, 2027, or 120 days after final rules.

The Federal Reserve followed up with two regulatory proposals for stablecoin issuers under that framework, signaling active rulemaking even without a final CLARITY vote.

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Why Passage Is Not Guaranteed, and What Investors Should Watch

The optimism has a ceiling. The Senate failed a cloture vote 49–50 on September 15, stalling CLARITY in its tracks.

Banking groups and New York legal associations opposed the bill ahead of that vote, citing deposit-flight risk if stablecoin accounts pay yields, and arguing that the underwriting language goes beyond prudent banking principles.

CRS echoes those concerns in neutral language. Its report lists pseudonymity, crypto market volatility, collateral risk, and deposit-insurance moral hazard as unresolved safety-and-soundness questions.

Credit unions face an additional constraint: the NCUA has not yet finalized its GENIUS Act rule governing stablecoin issuance through credit union service organizations (CUSOs), and a 1% investment cap remains a practical ceiling for smaller institutions.

The regulatory path has not waited for Congress. The SEC and CFTC have already made nine separate moves to write crypto rules without CLARITY.

That parallel track matters: if agencies lock in frameworks before a bill passes, legislative text may have to negotiate around an existing ruleset.

Meanwhile, Revolut’s conditional OCC approval for a national bank charter illustrates how firms are seeking bank-level permissions through existing pathways regardless of congressional timing.

Citi has noted the CLARITY setback as a headwind in its market outlook, even as it raised its 12-month Bitcoin target to $113,000.

The key variable, analysts say, is whether any revived Senate text preserves Section 401-style principal holding permissions, or trims them to win the votes that fell short in September.