On Sunday night, Senate Republicans released an updated draft of the CLARITY Act with changes to the ethics and other relevant provisions to sway Democrats to vote for the bill on Tuesday. However, it is still unclear whether these changes will be enough for Democrats to support the bill.
Senate Republicans Update CLARITY Act With Strict Ethics Rules
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Key Takeaways
- Senate Republicans updated the CLARITY bill with strict ethics rules to address Democratic demands.
- The draft shields developers from money laws and lets the Treasury restrict stablecoin rewards.
- The concessions raised the bill’s passage odds to 30% on Polymarket ahead of Tuesday’s Senate vote.
Senate Republicans Update CLARITY Act With New Ethics Language
Senate Republicans have surprised the crypto industry by releasing a new draft of the Digital Asset Market Clarity Act that makes changes to appease Democrats’ demands on some key issues, including ethics, and also touches on the stablecoin yield subject.
The updated draft includes changes that would allow state attorneys general to enforce prohibitions on issuing digital assets and take action against exchanges listing assets banned in the regulation.
Furthermore, a new ethics clause involves covered individuals divesting crypto-linked financial interests or placing them in a blind trust, a significant advance over the previous provisions.
The new text also includes changes that would allow blockchain developers to avoid money transmission requirements, establishing the U.S. as a safe harbor for these activities.
In addition, the 635-page updated draft also establishes a “circuit breaker” in the case of large deposit flight as a consequence of stablecoin gaining popularity, giving Treasury Secretary Scott Bessent the authority to restrict these rewards.
Senator Cynthia Lummis stressed that this was the final version of the bill, stating that it was ready after President Trump 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.”
“A no vote on Tuesday means opposing real ethics reforms on politicians’ personal investments, handing American leadership in digital assets to our foreign competitors, and leaving Americans with zero protections in the digital asset markets,” she concluded.
Nonetheless, it is still unclear whether this final draft will be enough to sway at least 7 Democrats to vote in favor of the CLARITY Act. Senate Minority Leader Chuck Schumer organized a caucus to discuss the partisan stance on the CLARITY Act on Sunday evening, but no public reports on the meeting were disclosed.
Even so, the changes were enough to lift the chances of CLARITY passing this year to 30% on prediction market platforms like Polymarket, even after analysts previously stated that the bill was dead. The vote on the CLARITY Act will happen on Tuesday.
