Updated Crypto Clarity Act Draft Circulates Days Before Senate Vote
New draft appears before Senate vote
Senate Republicans have started circulating an updated draft of the long-awaited Crypto Clarity Act, days before a key vote in the Senate. The draft was first described by reporters Eleanor Terrett and Brendan Pedersen, according to Bitcoin Magazine.
Key changes in the draft
DeFi is short for decentralized finance. The updated draft makes changes to how DeFi apps and credit unions are treated.
- Non-decentralized DeFi protocols would need to register with the CFTC.
- A DeFi app would fail the test for being decentralized if someone can control or materially alter its functionality, if it does not run solely on pre-established transparent encoded rules, or if someone can restrict or censor its use.
- A federal credit union may use a digital asset or distributed ledger system to perform, provide, or deliver any activity, function, product, or service it is otherwise authorized by law to perform.
Background and politics
The Clarity Act is designed to create a framework that formally divides oversight between regulators and identifies which digital assets are securities, commodities, or stablecoins. Crypto industry executives have long called for such rules.
The bill passed the House of Representatives last July but stalled this year. The main sticking point involved the banking lobby and crypto companies clashing over paying customers stablecoin yield. A separate ethics-related draft started circulating in July; it would ban government officials from promoting or making money from crypto.
Some pro-crypto lawmakers have criticized Democratic politicians they believe are deliberately holding back the bill. President Donald Trump has also called for the legislation to pass. In August, he said the U.S. must pass the "very, very powerful legislation" to remain the "undisputed leader in Bitcoin and crypto."
What is still unclear
The bill does not yet have bipartisan support, according to reporters. A group of Democrats says the bill fell short and has demanded amendments. The article does not specify which amendments they want.
Why this matters
A clear legal framework would formally divide responsibility between regulators and set rules for different types of digital assets. Industry executives have long said such rules are needed.
What happens next
The Senate is scheduled to vote on the Clarity Act on September 15.
