Leaked US Senate Crypto Bill Draft Excludes Stablecoin Revenue Provision

VADODARA, January 13, 2026 — A leaked draft of the U.S. Senate Banking Committee's crypto market structure bill, the CLARITY Act, has surfaced ahead of its official release, revealing the exclusion of stablecoin revenue provisions. This latest crypto news, reported by Eleanor Terrett on X, indicates a legislative pivot toward ethics regulations and software developer protections, reflecting a compromise between decentralized finance and traditional finance sectors. Market structure suggests this development could create regulatory Fair Value Gaps (FVGs) in stablecoin markets, similar to the liquidity shifts observed during the 2021 regulatory uncertainty period.

Market Context & Background

Historical cycles suggest that U.S. regulatory developments have consistently acted as liquidity catalysts or drains. The current legislative environment mirrors the 2021-2022 period when the Infrastructure Investment and Jobs Act created initial uncertainty around crypto tax reporting. According to on-chain data from Glassnode, previous regulatory announcements have triggered short-term volatility spikes of 15-25% in Bitcoin's realized volatility. The CLARITY Act represents the most comprehensive attempt at crypto market structure legislation since the 2022 Lummis-Gillibrand bill, which also faced multiple revisions before stalling in committee. Similar to the 2021 correction, current market conditions show elevated put-call ratios in Bitcoin options markets, indicating institutional hedging against regulatory outcomes.

What Happened?

According to the report by Eleanor Terrett, host of Crypto in America, an unfinished draft of the CLARITY Act was leaked this week. The draft excludes provisions related to stablecoin revenue that were anticipated by market participants. Instead, it includes two ethics regulations under the committee's jurisdiction, with notable provisions concerning felonies and insider trading. Section 601 specifically addresses protections for software developers, a point that industry sources cited by Terrett indicate reflects a compromise reached following a closed-door meeting last week. The text appears to balance DeFi innovation with traditional finance compliance requirements, creating what technical analysts would identify as a potential regulatory Order Block.

Technical Analysis & Price Action

Market structure suggests Bitcoin's current price action at $91,288 represents a consolidation phase within a broader range. The 4-hour chart shows resistance at $94,200 (previous swing high) and support at $88,500 (200-day moving average). Relative Strength Index (RSI) readings of 42 indicate neutral momentum with slight bearish bias. Volume Profile analysis reveals significant liquidity clusters between $89,000 and $92,000, suggesting this zone will determine near-term direction. The 50-day exponential moving average at $90,150 provides immediate dynamic support. Bullish invalidation occurs below $88,500, while bearish invalidation requires a break above $94,200 with sustained volume. Similar to the 2021 correction pattern, failure to hold the 200-day MA could trigger a Gamma Squeeze in options markets.

By The Numbers

Why It Matters

For institutional participants, the exclusion of stablecoin revenue provisions creates regulatory uncertainty around yield-generating mechanisms, potentially affecting capital allocation strategies. According to the Federal Reserve's financial stability reports, stablecoin markets represent approximately $150 billion in circulating supply, with revenue models contributing to systemic risk assessments. Retail impact may be more indirect, affecting decentralized exchange liquidity and lending protocol yields. The software developer protections in Section 601 could reduce legal liability concerns, potentially accelerating DeFi innovation. Market structure suggests this represents a liquidity grab opportunity for compliant entities, similar to how regulated exchanges gained market share during previous regulatory transitions.

Community Sentiment

Market analysts on X/Twitter have expressed cautious optimism about the compromise nature of the draft. One prominent quant trader noted, "The software developer protections create a clearer regulatory moat for legitimate projects." Another observer commented, "Excluding stablecoin revenue provisions leaves significant questions about Treasury management for issuers." The overall sentiment appears balanced, with neither extreme bullish nor bearish positioning dominating discussions. This contrasts with the polarized reactions to previous regulatory proposals like the SEC's custody rule changes in 2024.

Price Prediction / Future Outlook

Bullish Case: If the CLARITY Act provides clear regulatory pathways without stifling innovation, institutional capital could flow into compliant stablecoin issuers and DeFi protocols. Bitcoin could retest the $98,000 resistance level as regulatory uncertainty diminishes. Historical patterns indicate that regulatory clarity events have preceded 20-30% rallies in the 60-day window following implementation.

Bearish Case: Continued regulatory ambiguity around stablecoin revenue models could trigger capital outflows from crypto-native yield strategies. Bitcoin breaking below the $88,500 support could initiate a decline toward the $82,000 Fibonacci support level (0.618 retracement from recent highs). Market structure suggests this would create a Fair Value Gap (FVG) between $85,000 and $88,000 that would need filling.