A new report from Congress’s own nonpartisan research arm finds that the Senate version of the CLARITY Act would let U.S. banks and credit unions engage in 11 categories of crypto business — including digital asset underwriting and dealing, a power banks do not even hold in much of the traditional securities market.
By Ana Gonzalez | October 1, 2026
The Congressional Research Service published its analysis, “Crypto and Bank-Permissible Activities,” on September 30, examining how competing versions of H.R. 3633 would change what banks are allowed to do with digital assets. For regular investors, the report is a rare neutral map of what the fight in Washington is actually about: who gets to hold, trade and issue crypto — your bank, or separate companies.
The Hook: 11 New Powers for Banks — If the Bill Ever Passes
According to CRS, the Senate-reported text of the CLARITY Act would make 11 crypto activity categories available to banking organizations and credit unions. Crucially, the report notes the Senate version would not preserve the existing distinction between activities conducted inside insured banks — where customer deposits are protected by federal insurance — and activities assigned to nonbank subsidiaries, which sit outside that safety net.
The House-passed version takes a different route. Under that text, banks could use digital assets or blockchain technology only to carry out activities already permitted by law, and new crypto powers for financial holding companies would live in nonbank subsidiaries rather than insured banks. In simple terms: the House keeps crypto at arm’s length from the deposit-taking part of the bank; the Senate version lets it move inside.
The Core Conflict: Underwriting Powers Beyond Today’s Rules
The most striking finding in the CRS report concerns digital asset underwriting and dealing — the business of buying new token issues and reselling them to investors. CRS says these permissions would exceed banks’ current authority in comparable securities markets, where banks can underwrite and deal only in limited categories, such as instruments issued by federal and state governments or their agencies.
Senator Cynthia Lummis has argued the legislation would allow U.S. banks to buy and hold Bitcoin directly, predicting the resulting demand could push prices “dramatically” higher. That is a forecast, not a fact — and it depends on a bill that is currently stuck. On September 15, the Senate rejected cloture on the motion to proceed with H.R. 3633 by a vote of 49 to 50, leaving the measure below the 60-vote threshold needed to open debate. The procedural defeat was not a final vote on the legislation itself: seven Democratic senators who opposed advancing the measure later described the outcome as “not the end” and said they remained committed to negotiations, according to September 22 coverage.
On-Chain Evidence: Banks and State Prosecutors Are Pushing Back
Two coalitions have already tried to reshape the bill. Eight banking associations asked lawmakers to revise provisions covering rewards paid to stablecoin holders, focusing on Section 10404. The groups argued that payments resembling deposit interest could encourage customers to pull funds out of banks — and that lost deposits would reduce lenders’ ability to extend credit to households, farmers and businesses.
- “Deposits are the foundation of the banking system” — the banking associations’ warning in their challenge to the bill’s stablecoin reward provisions
- A revised Republican proposal would let the Treasury secretary restrict certain rewards if stablecoins caused substantial deposit outflows from community banks
- 17 state attorneys general, led by New York’s Letitia James, challenged provisions they said could weaken state securities enforcement and impede crypto fraud cases
- Existing anti-money-laundering duties remain in force regardless of the bill — customer identification, sanctions screening and suspicious activity reporting stay mandatory, per Prove’s Fernando Castellanos
The banking groups’ core objection is about wording: they worry the current text could permit rewards calculated partly from a customer’s stablecoin balance even when another condition is attached. They want the ban written directly into law rather than depending on intervention after deposits have already left.
Market Implications: The Fed Is Not Waiting for Congress
While the market-structure fight stalls, the Federal Reserve has kept implementing the already-enacted GENIUS Act, the federal framework for payment stablecoins. On September 24, the Fed released two proposals. The first would require supervised issuers to fully back outstanding stablecoins with permitted assets, including short-term Treasury bills, and covers capital requirements, risk management and firms safeguarding reserves. The second would create an application process for supervised banks seeking permission to issue payment stablecoins.
The mechanics are investor-friendly in their clarity: the Fed would notify applicants within 30 days whether their submissions are substantially complete, and a complete application then enters the GENIUS Act’s 120-day decision period. Treasury has identified January 18, 2027 as the expected effective date for the law’s main issuer restrictions. Regulated, fully-backed stablecoins issued through banks are moving from idea to paperwork while Congress argues about the rest.
The Verdict: What This Means for You
If the Senate version of the CLARITY Act eventually becomes law, your local bank could one day underwrite token offerings, hold Bitcoin directly, or run a crypto trading desk — powers that would pull digital assets deep into the regulated financial mainstream. That is the bull case institutional investors watch. But the CRS report also explains why the fight is taking so long: banks fear losing deposits, states fear losing enforcement power, and nobody has agreed where the line between “business of banking” and “financial in nature” should sit.
For now, the practical reality is that stablecoin rules under the GENIUS Act are advancing without Congress, while the bigger question — whether your bank becomes your crypto exchange — remains parked at 49 votes.
The cryptocurrency market remains highly volatile. This article is for informational purposes only and does not constitute financial advice.
digital asset underwriting and dealing for insured banks, a power they dont even have with regular securities. what could possibly go wrong
an insured bank dealing digital assets it cant even deal in regular securities. the crs report says the quiet part out loud, this is a bank expansion bill wearing a crypto costume
a bank expansion bill in a crypto costume is exactly it. check who lobbied for the senate language, it was not privacy advocates
CRS rarely lays it out this plainly. 11 activity categories is a lot of new surface area for a bill most people still think is just about stablecoins
right? everyone keeps calling H.R. 3633 a market structure bill when the senate text basically redraws the bank perimeter entirely
credit unions issuing crypto. mine cant even process a wire transfer without three phone calls
lol mine put a 3 day hold on a debit card for a vpn subscription. crypto underwriting powers, sure
watched the banking committee markup last month, half of them couldnt define a digital commodity on the spot. now they hand out underwriting powers lol
11 new powers for banks and still nothing clear on self custody. of course
the house version at least mentions custody protections, the senate text skips it entirely. guess which one survives conference
house custody language surviving conference feels optimistic given who holds the gavel. the bank perimeter redraw is the part with real lobbying muscle behind it
thats the whole point of the bill tho. keep it inside the banks, keep it traceable and taxable
Read the CRS summary last week. Most of these powers mirror what banks already do with securities custody. The 11 new powers framing is a bit dramatic but the direction is clear.
custody mirroring securities is the easy part. the senate text adding underwriting and dealing, powers banks lack even for regular securities, is where the framing stops being dramatic
clausehound covered it above, underwriting and dealing goes beyond what banks hold even for regular securities. read that part again, the framing is fine
the CRS detail nobody quotes: the senate text drops the insured bank vs nonbank subsidiary split that the house kept. that single line is the whole negotiation
the insured bank vs nonbank subsidiary split getting dropped in the senate text is the detail everyone skips. thats where custody protections live or die in conference
the nonbank subsidiary split is exactly the line to watch. conference already smells like the senate text winning, and with it goes whatever custody protections the house bothered to write