Senator Lummis Highlights Over 100 Democrat-Requested Changes in Updated CLARITY Act

Senator Cynthia Lummis announced that the latest version of the CLARITY Act incorporates over 100 amendments sought by Democratic lawmakers. The revised text, now 630 pages long, adds 14 pages to the July 22 draft and is slated for a procedural vote that will determine if it proceeds to the Senate floor.

Key Revisions in the September Draft

The bill continues to contain four divisions and 103 sections, but changes appear in roughly a dozen sections within the Banking and Agriculture titles. Compared with the July draft, 14 sections have been altered, yielding 104 discrete edits, most of which are brief.

DeFi Safe Harbor Expansion

• Section 20209, the DeFi safe harbor, expands from 285 words to about 2,200 words.
• Validators, node operators, and wallet software publishers receive a carve‑out from the Commodity Exchange Act.
• Front‑ends, governance systems, liquidity pools, and wallet software maintenance are limited to spot‑market rules.
• “Decentralized‑in‑name‑only” protocols must obtain CFTC rulemaking guidance rather than automatic registration, and the code itself is not required to register.
• The Treasury will issue matching anti‑money‑laundering rules for entities the CFTC brings under its oversight.

State Law Preemption and Fraud Powers

• State securities, commodities, and digital‑asset regulations no longer apply to covered activities, including conduct before enactment.
• State fraud, manipulation, and AML enforcement powers remain intact.

Other Notable Adjustments

• Credit unions receive clearer guidance aligned with definitions from the GENIUS Act, though brokerage authority is unchanged.
• CFTC spot‑market oversight now extends to all payment stablecoins, not only those issued by licensed entities.
• Section 10404 (yield on payment stablecoins) and Section 10604 (developer protections) remain unchanged from the July version.

Political Landscape

Republican senators Josh Hawley and Jerry Moran have expressed concerns about yield restrictions on stablecoins, while the American Bankers Association and other banking groups have urged tighter rules to prevent deposit flight from community banks. Democrats have linked their support to stronger ethics provisions concerning former President Donald Trump’s crypto holdings. A cloture vote is scheduled for Tuesday afternoon, requiring 60 votes to move the bill forward.