Senate Republicans Release Final Clarity Act Text Ahead of Tuesday Vote

Senate Republicans unveiled the final text of the Clarity Act on Sunday, integrating changes demanded by Democrats and rewriting the contentious ethics title. The substitute amendment spans 635 pages, five pages longer than the September 10 draft, and will be voted on Tuesday afternoon.

Key Ethics Revisions

• New ban on holding a “significant financial interest” – defined as $15,000 or more of equity in any business that derived a plurality of its revenue from issuing or sponsoring tokens in the past three years. Holders must divest or place assets in a blind trust.
• Coverage extended to presidents‑elect, vice presidents‑elect, and members‑elect before inauguration, but spouses remain the only family members covered.
• 2029 sunset provision and severability clause removed.
• Penalty structure changed: a 20% floor, inflation‑adjusted, applies to both interest and transaction amounts.
• State attorneys general now have standing to sue, replacing the earlier restriction that barred them and private plaintiffs.

Changes Beyond Ethics

• The “exchange own‑account rule” is retitled as a prohibition on proprietary trading, with narrower exceptions based on a “necessary” test subject to new CFTC rules.
• Exchanges and wallets face a new circuit‑breaker: if Treasury determines within 18 months that community‑bank deposits are flowing into stablecoins, it must issue rules covering yield “similar to” bank interest.
• “Network token” is redefined as a digital asset rather than a digital commodity, broadening its scope.
• State deceptive‑practice enforcement remains unless preempted.
• CFTC exemptions must now follow the Commodity Exchange Act’s Section 4(c) process.
• Software developers receive protection from BSA registration and financial‑institution status but lose explicit protection from criminal money‑transmitting liability.

Political Context

Senators Cynthia Lummis, John Boozman, and Tim Scott said the text reflects over a year of bipartisan negotiations and includes 126 substantive edits requested by Democrats. The vote on cloture requires 60 votes; Republicans present the final draft as their last offer before the Tuesday vote.