Senate GOP Delivers 'Final' CLARITY Act Proposal to Democratic Colleagues
A revised version of the CLARITY Act has been unveiled by Senate Republicans as their concluding proposal to Democrats, ahead of a critical procedural vote scheduled for Tuesday.
On Sunday, Senate Republicans unveiled an updated version of the CLARITY Act text in an effort to win over Democratic lawmakers before Tuesday's procedural vote, incorporating significant modifications to regulations concerning government officials' engagement with digital assets.
The comprehensive 635-page document, put forward by US Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis in conjunction with Chairmen John Boozman and Tim Scott, contains amendments to the Blockchain Regulatory Certainty Act (BRCA) as well as provisions addressing stablecoin yield. According to Lummis, the updated ethics provisions received approval from US President Donald Trump.
After a year of intense daily bipartisan negotiations, this bill is ready. President Trump voluntarily agreed to unprecedented ethics restrictions, holding every federally elected official, judge, and their spouses to some of the toughest ethics restrictions in US history.
Cynthia Lummis, US Senate Banking Digital Assets Subcommittee Chair
The updated legislative text arrives merely two days in advance of Tuesday's procedural vote on the CLARITY Act scheduled for 2:15pm ET, a vote that will decide whether the Senate can move the bill forward for floor deliberation. According to a Republican aide who spoke with reporters on Sunday, the proposal represents a final offer regarding the bill.
Key changes in final CLARITY Act text
According to Lummis, the final legislative text represents a year's worth of bipartisan negotiations and incorporates 126 modifications requested by Democratic lawmakers.
The updated ethics regulations would grant state attorneys general the authority to enforce prohibitions preventing federal officials from issuing, sponsoring or maintaining significant financial interests in digital assets, as well as preventing exchanges from listing assets that violate such prohibitions.
Individuals subject to these rules would also face requirements to divest significant financial interests or transfer them into a qualified blind trust. Civil penalties for violations would amount to $500,000 or 20% of the value received in the prohibited transaction, whichever sum is greater, with the ethics provisions becoming effective 360 days following enactment, or earlier if implementing regulations are completed.
Regarding stablecoins, the Treasury Secretary would face a requirement to implement rules restricting rewards if a determination is made that community banks are experiencing deposit losses on a substantial scale, although this authority would sunset 18 months following the bill's enactment into law.
In the meantime, the revised BRCA would maintain protections preventing developers from being classified as money transmitters or financial institutions under the Bank Secrecy Act and would expand these protections to include miners and validators, who were previously left out.
Additionally, it would eliminate references to Section 1960 of Title 18 of the US Code, a provision that pertains to the prohibition of unlicensed money transmitting businesses.
Additional modifications would enhance safeguards surrounding affiliate trading and conflicts of interest at digital commodity exchanges, brokers and dealers, and provide clarification on the application of consumer protection laws.