Senate Republicans released a heavily revised Clarity Act on Monday with new ethics, banking and consumer protections as lawmakers prepare for a pivotal procedural vote requiring 60 votes to advance the cryptocurrency legislation.
By yourNEWS Media Newsroom.
Senate Republicans released a new version of sweeping cryptocurrency legislation Monday, adding dozens of changes intended to address Democratic demands for stronger ethics and illicit-finance protections while attempting to ease banking-industry concerns about the potential loss of deposits to digital assets.
The revised Clarity Act arrives one day before a critical procedural vote that could determine whether the legislation moves forward. Sixty votes will be required to advance the measure, and it remained unclear Monday whether supporters had secured enough backing.
Republican Sens. Cynthia Lummis of Wyoming, John Boozman of Arkansas and Tim Scott of South Carolina said the new text incorporates 126 substantive changes requested by Democrats during months of negotiations.
“After a year of intense daily bipartisan negotiations, this bill is ready,” Lummis said in a statement. “Democrats got what they wanted; now they need to take yes for an answer.”
The Clarity Act is intended to establish a federal regulatory framework for cryptocurrencies and resolve longstanding disputes over how digital assets should be regulated. The legislation has stalled amid objections from Democrats and some Republicans who argued earlier versions did not contain sufficient safeguards involving ethics and illicit finance.
Banks have raised a separate concern: that provisions benefiting cryptocurrency companies and stablecoin products could draw deposits away from traditional financial institutions, potentially reducing money available for lending.
The new draft attempts to address both sets of concerns.
Democrats had pressed negotiators to impose stricter restrictions on elected officials and other public officeholders profiting from their own cryptocurrency ventures, an issue that has drawn increased attention because of President Donald Trump’s involvement with World Liberty Financial.
Trump disclosed in June that he had earned $1.4 billion from his cryptocurrency ventures, according to Reuters.
The revised legislation incorporates ethics provisions developed by Republican Sen. Thom Tillis of North Carolina and Democratic Sen. Ruben Gallego of Arizona. Among the changes is expanded authority for state attorneys general to enforce the restrictions.
“President Trump voluntarily agreed to unprecedented ethics restrictions, holding every federally elected official, judge, and their spouses to some of the toughest ethics restrictions in U.S. history,” Lummis said.
Spokespeople for Tillis and Gallego did not immediately say whether the two senators supported the final revised text.
Republican sponsors also said the bill now contains additional protections intended to safeguard bank deposits and consumers.
Those provisions include new restrictions governing affiliate trading, clarification of how state consumer-protection laws apply to digital-asset businesses and protections for software developers whose technology may be used in cryptocurrency transactions.
The modifications have not eliminated opposition from the banking sector.
An industry official said financial institutions remain concerned about language allowing cryptocurrency companies to offer rewards on dollar-backed digital tokens known as stablecoins. Banks have argued that such products could compete directly with conventional deposits and ultimately affect their ability to make loans.
The disagreement has fueled an increasingly intense lobbying battle between traditional financial institutions and the cryptocurrency industry.
Crypto companies and advocacy organizations have spent hundreds of millions of dollars supporting policies favorable to digital assets and have argued that passage of the Clarity Act would replace regulatory uncertainty with clearer rules governing the industry.
During Congress’ August recess, cryptocurrency advocates intensified that campaign in senators’ home states, organizing events, placing opinion pieces and contacting lawmakers as Tuesday’s vote approached. Banking organizations mounted their own campaign warning senators about the potential consequences for community banks and the broader deposit system.
Supporters of the legislation argue that clearer rules are necessary to determine which digital assets fall under securities regulations, which should be treated as commodities and which federal agencies have jurisdiction over them.
Critics have focused on whether the framework adequately addresses money laundering, public-official conflicts of interest and financial risks that could arise if digital assets compete more aggressively with traditional banking products.
Monday’s revised text represents the latest effort to bridge those disagreements before the Senate vote.
Despite the 126 Democratic-requested changes, supporters still face the central question of whether enough senators are prepared to move the legislation forward.
The answer could come Tuesday, when the Senate’s procedural vote tests whether the extensive negotiations over ethics, consumer protections, illicit finance and bank deposits have produced the bipartisan coalition necessary to clear the 60-vote threshold.
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