The United States Senate Banking Committee is set to consider landmark cryptocurrency legislation on Thursday in a major step towards regulating the digital asset industry.

The proposed Clarity Act aims to define how cryptocurrencies are regulated in the US and clarify whether digital tokens should be treated as securities or commodities.

THe committee’s debate and vote will test whether the Republican-backed bill can gain enough Democratic support to pass the full Senate.

Elizabeth Warren, the committee’s top Democrat has criticised the proposal, arguing its anti-money laundering protections are too weak and warning it could threaten national security and the financial system.

According to Reuters, the cryptocurrency industry has spent heavily lobbying for the legislation, saying clearer rules are needed to support growth and wider adoption of digital assets.

“It’s taken years of work to get to this point,” said Miller Whitehouse-Levine.

Banking groups have also opposed parts of the bill, particularly provisions linked to stablecoins, arguing they could create competition for traditional bank deposits.

US President Donald Trump has prioritised cryptocurrency reform during his second term, while the White House has reportedly pushed strongly for the bill’s approval.