While CLARITY hasn’t passed, Wall Street is already open for business
- Key Takeaway: In May 2026, while the Clarity Act, a crypto market structure bill, is still awaiting passage in the Senate, major Wall Street brokerages (like E*Trade and Charles Schwab) have begun offering spot crypto trading to retail investors at fees significantly lower than native exchanges. Meanwhile, the “ethics clause” in the bill, which aims to limit the President’s family’s crypto gains, has become a key point of political contention.
- Key Elements:
- On May 6, E*Trade launched spot trading for BTC, ETH, and SOL with a 0.50% fee to its 8.6 million retail clients, setting a record low fee among Wall Street brokerages and roughly two-thirds lower than Coinbase's retail fees (1.5%-3.5%).
- The compliance confidence behind Wall Street’s concentrated entry (April-May 2026) stems from the enacted stablecoin legal framework under the GENIUS Act and a higher perceived probability of the Clarity Act passing, which has reduced regulatory uncertainty.
- The Clarity Act divides digital assets into three main pools: “digital commodities” regulated by the CFTC, “investment contract assets” regulated by the SEC, and “payment stablecoins” regulated by banks. It also introduces DeFi activity exemptions and dual registration requirements for intermediaries.
- The “ethics clause” demanded by Democrats aims to prohibit officials from profiting from crypto assets, directly targeting the Trump family’s approximately $4.3 billion in crypto holdings (including $1.47 billion realized and $2.8 billion unrealized). This has become the core obstacle to the bill’s progress in the Senate.
- The bill has already passed the House (294 to 134), but Senate consideration is deadlocked over the ethics clause. If it misses the August recess or the November midterm elections, the probability of passage by the end of 2026 will significantly decrease (historical success rate: only 1 crypto bill has been signed into law in 6 years).
On May 4th, the White House stated its desire for Congress to send the Clarity Act to the President's desk before July 4th. This crypto market structure bill had already passed the House in July 2025 with a vote of 294 to 134, but has been stalled in the Senate for nearly a year.
The Senate Banking Committee, chaired by Tim Scott, has scheduled the markup to be completed within May, aiming to push for a full Senate vote in June or July. The obstacle in the middle is an "ethics clause" demanded by Democratic lawmakers, which would prohibit senior government officials from personally profiting from crypto assets while in office. The target of this clause is the President himself.
Two days later, on May 6th, Morgan Stanley's E*Trade opened up spot trading for Bitcoin, Ethereum, and Solana to its 8.6 million retail customers at a 0.50% fee rate. This is currently the lowest retail crypto fee offered by a major Wall Street brokerage. The bill hasn't passed yet, but the traditional big banks have already opened for business.
Whether Congress waits for the bill or not, Wall Street has already given its answer.
Wall Street Has Already Opened for Business
Even before the bill has passed, traditional brokerages have made a concentrated entry between April and May 2026, driving retail fee rates down to a new floor.
The timeline looks like this. On February 22, 2018, Robinhood became the first to integrate crypto trading into its retail internet brokerage, launching with zero commission (including spread). In the same year, Coinbase launched its retail app, with retail fees ranging from 0.99% to 2.99% plus a 0.5% spread. In 2022, Coinbase introduced Advanced Trade, lowering retail fees to 0.40% to 0.60%. In 2023, Fidelity Crypto launched with a 1% fee rate. Then there was a two-year gap.
In early April 2026, Charles Schwab launched Schwab Crypto, offering spot Bitcoin and Ethereum trading to retail customers in phases, with a fee rate of 0.75%. A month later, on May 6th, Morgan Stanley's E*Trade followed suit at 0.50%, covering Bitcoin, Ethereum, and Solana. According to BeInCrypto, this is currently the lowest retail crypto trading fee among traditional major banks.
Comparing the fee structures shows the pressure. Coinbase's standard app charges retail users most commonly 0.99%-2.99% plus a 0.5% spread, effectively costing 1.5%-3.5%. E*Trade's 0.5% effectively cuts this number to one-third. Fidelity's 1% has now become the most expensive among peers. Coinbase Advanced Trade remains competitive, but it's a professional interface for high-frequency and high-net-worth users, not the go-to retail option for average customers.
Why the concentrated opening in April-May 2026? Two key anchor points. One is the GENIUS Act (the stablecoin legal framework), which was signed into law in July 2025, providing a compliant pathway for traditional financial institutions to custody and settle stablecoins. The other is the Clarity Act heading to a Senate markup. Regardless of the final outcome, the contours of the mainstream market structure are already clear, and traditional big banks no longer fear regulatory retroactivity after entering the market. Wall Street is making decisions based on the probability distribution that "the Clarity Act will likely pass," rather than waiting for the bill to be signed.
The 'Ethics Clause' Targets the President
The ethics clause demanded by Democratic lawmakers has been repeatedly submitted to the White House since 2025, only to be repeatedly rejected. The reason is not abstract. According to a Bloomberg report from January 2026, approximately one-fifth of the Trump family's $6.8 billion fortune comes directly from crypto projects.
Breaking down these projects reveals more specifics. Realized cash flow is approximately $1.47 billion, primarily from four products. Sales of the World Liberty Financial (WLFI) token account for the largest share. As of December 2025, the Trump family has accumulated approximately $1 billion in profits through this DeFi project, including $550 million raised from public offerings.
The $TRUMP memecoin, launched three days before the January 2025 inauguration, brought the family $362 million in fees and trading profits. Melania's $MELANIA memecoin followed suit, contributing approximately $65 million. Interest from the USD1 stablecoin reserves amounted to $42 million.
The unrealized holdings valuation is approximately $2.8 billion. WLFI still has $1.5 billion worth of unsold tokens on its books, but this is highly volatile depending on the price of WLFI. Trump Media's Bitcoin reserve is estimated by FinanceFeeds to be between 9,500 and 11,500 BTC, worth approximately $840 million at current Bitcoin prices. The USD1 business valuation and equities like American Bitcoin mining total approximately $460 million.
Combined, realized and unrealized amounts total approximately $4.3 billion. This is the real number behind the ethics clause. The version pushed by lawmakers like Elizabeth Warren explicitly states "to prohibit senior sitting officials from personally profiting from crypto assets while in office." A compromise version was sent to the White House and rejected. Whether the bill includes this clause when it goes to a full Senate vote essentially asks each senator: are you willing to cast a vote in public, openly cutting away this $4.3 billion pie from the President's family?
Can CLARITY Pass This Year?
The Clarity Act forcibly categorizes all digital assets into three pools. The first pool is "digital commodities," regulated by the CFTC, corresponding to tokens running on "mature blockchain systems." The Act defines "mature" with two hard criteria: first, the network is fully functional and achieves consensus; second, it is sufficiently decentralized, with no single entity able to unilaterally modify the protocol or governance.
The second pool is "investment contract assets," under SEC jurisdiction, corresponding to tokens representing equity, debt, or similar rights (e.g., tokenized stocks, traditional securities distributed on-chain, RWAs like real estate, notes, accounts receivable). The third pool is payment stablecoins, led by banking regulators, requiring full compliance with capital, custody, and anti-manipulation standards.
Compared to FIT21, which died in the Senate in 2024, the Clarity Act has three upgrades. Stablecoin attribution changed from "left unspecified" to "allocated by trading venue": stablecoin transactions on CFTC platforms are regulated by the CFTC, those on SEC platforms by the SEC, but the SEC retains only anti-fraud authority.
DeFi exemptions moved from a principle-based safe harbor to an enumerated list of specific activity exemptions. Custody front-ends, running nodes, and publishing code will not trigger registration obligations. Exchange registration was changed from "cross-agency coordination" to a mandatory dual registration requirement for intermediaries dealing in digital commodities, even if that intermediary is already an SEC-licensed broker-dealer.
The logic of the bill is clear: to enshrine in law the biggest uncertainty of the crypto industry over the past few years – "who exactly is in charge of this?" – once and for all.
The Clarity Act currently stands with few predecessors.
According to public statements from Representative French Hill's office, over 40 crypto and blockchain-related bills were introduced in the 116th Congress (2019-2020) alone. The final passage rate for these bills was zero. In the 118th Congress (2023-2024), FIT21 appeared and passed the House in May 2024. This was the first crypto market structure bill to pass a full House vote, but it also died in the Senate.
On July 18, 2025, Trump signed the GENIUS Act, establishing law for payment stablecoins. This was the first, and so far the only, crypto-related federal bill signed into law in 6 years. On July 17 of the same year, the House passed the Clarity Act by a vote of 294 to 134. Theoretically, the Clarity Act is now in the same position FIT21 was: passed by the House, awaiting a Senate vote.
The difference lies in the political environment. During the FIT21 era, Democrats controlled the White House, and there was no top-level impetus for crypto legislation. Now, the Trump administration is pushing it publicly. However, the compromise version of the ethics clause was rejected by the White House, and key Democratic senators remain unconvinced. If the window is missed before the first week of August, the Senate will be on recess until September 14th. Considering the November 3rd midterm elections, whether it can be signed into law in 2026 is no longer entirely within the "White House's wishes" to decide.
Historically, out of 50+ bills over 6 years, only one has been signed into law. Whether the Clarity Act will be the second will be decided in the next two months.
