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CLARITY Act: Senate Republicans release revised crypto regulation bill

Senate Republicans have released a revised 630-page draft of the CLARITY Act, a major piece of digital asset market-structure legislation. The updated text incorporates over 100 changes requested by Democrats during August negotiations, according to Senator Cynthia Lummis. Key revisions include a new framework for “non-decentralized finance trading protocols,” which would require entities that can materially alter a protocol's functions to register with the Commodity Futures Trading Commission (CFTC).

The revised bill also limits DeFi provisions to spot and cash digital commodity transactions, a move intended to address concerns regarding prediction markets. Additionally, the legislation seeks to clarify the division of oversight between the SEC and CFTC. While the bill includes protections for software developers, it faces ongoing debate regarding ethics provisions and stablecoin regulations. Specifically, the Independent Community Bankers of America is urging a prohibition on stablecoin yield to prevent competition with local community bank deposits.

A critical procedural cloture vote is scheduled for September 15. This vote requires 60 Senate votes to proceed to formal debate. Coinbase CEO Brian Armstrong noted that while the legislation provides a preferred statutory framework, the industry may still see regulatory clarity through independent rules issued by the SEC and CFTC even if the bill fails to advance.

Entities

Brian Armstrong · Coinbase · Commodity Futures Trading Commission · Cynthia Lummis · Securities and Exchange Commission · Senate · Senate Republicans · United States Senate

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