Senate Republicans have released updated CLARITY Act text ahead of a September 15 procedural vote, incorporating more than 100 changes requested by Democrats following weeks of negotiation during the August recess. The revisions address several key areas while leaving contentious ethics provisions intact.
New DeFi and Credit Union Rules
The updated bill introduces requirements for non-decentralized DeFi protocols—platforms marketed as decentralized but lacking actual decentralized functionality—to register with the Commodity Futures Trading Commission (CFTC). The language mirrors existing banking committee provisions, though it limits DeFi regulations to spot or cash digital commodity transactions, a change addressing concerns raised by some Native American tribes regarding blockchain-based prediction markets.
Credit unions gained clearer authority to engage in cryptocurrency transactions under the revised language.
Democratic Support Hinges on Ethics Disputes
Republican Senator Cynthia Lummis of Wyoming described the revisions as products of bipartisan negotiation, noting the updated text includes more than 115 Democratic "wins," including felony fraud bars, $150 million in CFTC funding, and crackdowns on major platforms.
However, the ethics section remains unchanged, and this stall represents the largest obstacle to Democratic support. Democrats have sought provisions requiring elected officials to divest relevant crypto interests or place them in blind trusts. The issue gained prominence after scrutiny into President Donald Trump's crypto dealings, which reportedly generated $1.2 billion.
Coinbase CEO Brian Armstrong recently backed a "yes" vote and stated that lawmakers had resolved his company's previously identified must-have changes, though he acknowledged ethics negotiations as a final matter requiring settlement.
The Path Forward
The September 15 vote requires 60 senators to invoke cloture on the motion to proceed, making Republican success dependent on Democratic support. Senator Lummis has argued that failure to pass would stem from Democratic refusal to accept bipartisan compromise rather than unresolved policy issues. Treasury Secretary Scott Bessent similarly urged senators on September 9 to continue negotiating and advance the legislation.
