Senate Republicans have released a revised 630-page Clarity Act that adds federal oversight for certain crypto trading protocols five days before a scheduled Sept. 15 procedural vote.
Summary
- Senate Republicans released a 630-page Clarity Act draft before the September 15 procedural vote begins.
- The revised text creates CFTC registration rules for trading protocols that fail its decentralization standard.
- Lummis says Republicans incorporated more than 114 provisions requested by Democratic senators during negotiations and talks.
- Ethics language still gives the Justice Department primary enforcement authority and expires in January 2029.
- Sixty Senate votes are needed to advance the bill before debate and potential amendments begin.
Sen. Cynthia Lummis said on Sept. 10 that Republicans had incorporated more than 114 provisions requested by Democratic senators during negotiations. The Wyoming Republican described the new version as a bipartisan product, although no Democratic senator had publicly endorsed the revised text when it was released.
The Senate vote will determine whether lawmakers can begin formal debate on the crypto market structure bill. It is not a final vote on passage. Republicans need enough Democratic support to reach the Senate’s 60-vote procedural threshold because they control 53 seats.
Clarity Act revision targets controlled trading protocols
New language in the Clarity Act establishes a category called a “non-decentralized finance trading protocol.” The draft applies the term to people or coordinated groups that possess direct or indirect authority to control or materially change a protocol’s functions, operations or consensus rules.
Protocols covered by the definition would need to register with the Commodity Futures Trading Commission. The bill directs the CFTC and the Treasury Department to develop implementing rules, leaving the agencies to determine how the standard would work across different technical and governance arrangements.
The provision seeks to separate systems operating without a controlling party from platforms marketed as decentralized while retaining identifiable management or upgrade authority.
Questions about control have remained central to the Senate debate over DeFi regulation. Lawmakers have disagreed over whether software developers, interface operators and governance participants should face financial compliance duties when they do not take custody of customer assets.
The latest text limits its DeFi provisions to spot and cash digital commodity transactions. Lummis said the clarification responds to concerns from tribal governments about whether the legislation could affect prediction markets, which may involve separate federal and state legal questions.
Credit unions received further clarification on permissible digital asset activity, according to her statement. Public summaries available Thursday did not identify every provision changed in the full draft.
Ethics language remains a barrier to Democratic votes
The revised Clarity Act retains an ethics provision restricting public officials, government employees and their spouses from issuing or sponsoring digital assets. Enforcement authority would remain primarily with the Justice Department, while the restriction would expire in January 2029.
President Donald Trump accepted the provision in July, but Democratic lawmakers called it inadequate. Their objections have centered on the scope of the covered activity, the limited enforcement mechanism and the provision’s expiration date.
Trump and members of his family have financial connections to World Liberty Financial and the TRUMP memecoin. Critics say legislation regulating crypto markets should contain stronger restrictions governing digital asset interests held by senior federal officials.
A separate ethics proposal developed by Democratic senators and Republican Sen. Thom Tillis sought stronger terms. The Sept. 10 revision did not adopt major elements of that alternative, according to a report from Politico.
No Democratic support had been secured for the latest version at publication time, Politico reported. The lack of public commitments leaves Republicans short of the votes required to open debate if the chamber divides along party lines.
Lummis said the bill would give the digital asset industry a durable statutory structure that could not be changed as easily as agency rules following a new presidential administration. Her statement represents the sponsors’ position on the legislation’s value and permanence.
Stablecoin rewards and bank deposits remain disputed
Banking groups and crypto companies continue to disagree over stablecoin rewards. Banks contend that rewards paid on stablecoin balances could encourage customers to move money from insured accounts, reducing deposits used to support lending.
Crypto companies argue that transaction-based incentives differ from interest paid on bank deposits. Earlier Senate language prohibited payments based solely on holding a stablecoin while permitting rewards connected with payments, loyalty programs and other qualifying activity.
The disagreement has generated lobbying campaigns in senators’ home states. Reuters reported that the Independent Community Bankers of America had arranged meetings between local bankers and senators during the August recess.
Stand With Crypto, an advocacy organization backed by Coinbase, said its supporters contacted members of Congress nearly 50,000 times during August. The group reported holding events and publishing opinion pieces across several states to support passage.
Some Republicans have raised concerns alongside Democratic critics. Sens. James Lankford and Mike Rounds have questioned whether the bill could allow certain digital tokens to compete with traditional deposits, Reuters reported.
Democrats have cited separate concerns involving money laundering controls, consumer protection and market integrity. The revised protocol language addresses one part of the illicit-finance debate, but its release did not produce an announced agreement on the remaining disputes.
The Sept. 15 vote only opens floor debate
Senate Majority Leader John Thune scheduled the procedural vote for Sept. 15, one day after senators return to Washington. The scheduled vote requires 60 senators to support moving the Clarity Act into floor consideration.
A successful vote would permit debate and open the bill to amendments. Senators could seek changes to the ethics provision, stablecoin reward rules, DeFi requirements or the allocation of authority between the Securities and Exchange Commission and CFTC.
The legislation would create federal classifications for digital assets and divide oversight between the two market regulators. The CFTC would receive authority over spot markets for assets classified as digital commodities, while the SEC would retain jurisdiction over securities.
House lawmakers previously passed their version of the Clarity Act with support from members of both parties. Any changes adopted by the Senate would require the two chambers to approve identical text before the legislation could reach Trump.
Time remains limited because lawmakers are preparing for the November midterm elections. Reuters reported that crypto companies view the remaining 2026 legislative calendar as a critical opportunity, while analysts described the bill’s prospects as uncertain because of opposition from Democrats and several Republicans.
Lummis, who is not seeking another Senate term and will leave Congress in January 2027, has continued pressing lawmakers to approve the measure. In a Sept. 9 statement, she argued that the United States should set its own crypto rules instead of allowing jurisdictions such as Singapore or the United Arab Emirates to take the lead.
If the motion receives at least 60 votes, Senate leaders can proceed to debate and schedule amendment votes. Fewer than 60 votes would prevent the chamber from moving to the current bill unless leaders negotiate new terms and schedule another procedural attempt.
