Senate Republicans unveil revised crypto bill ahead of key Clarity Act vote next week

Senate Republicans have released a revised draft of the Clarity Act, a comprehensive cryptocurrency bill that will face its first procedural vote on September 15. The 630‑page text adds new rulemaking language for “non‑decentralized finance trading protocols” and expands provisions requested by Democratic lawmakers.

Key additions to the bill

• Definition of non‑DeFi trading protocols as entities that can control or materially alter the functionality of a decentralized finance protocol.
• Requirement for such protocols to register with the Commodity Futures Trading Commission (CFTC).
• Mandate for the CFTC and the Treasury to develop implementing rules.
• Clarification that DeFi provisions apply only to spot and cash digital commodity transactions, addressing concerns from tribal governments about prediction markets.
• Updates on how credit unions may conduct crypto activities.

Political context

The bill aims to provide a lasting legislative framework for the crypto industry, contrasting with the uncertainty of executive rulemaking. It incorporates more than 114 provisions added at the request of Democratic colleagues, though the latest version reportedly lacks Democratic support for passage.

Ethics and enforcement

The legislation retains an ethics provision that bars public officials, employees, and spouses from issuing or sponsoring digital assets, with enforcement delegated to the Justice Department and an expiration date of January 2029. Democrats have criticized the language as insufficient and have offered alternative language alongside Republican Sen. Thom Tillis.

Outlook

With the Senate returning to Washington on a tight schedule, the Clarity Act faces a challenging path to the President’s desk. Its fate will depend on bipartisan support and resolution of outstanding issues, including the treatment of stablecoin rewards and concerns about illicit finance.