The time has come for the US Senate to determine if the US is going to move forward with profoundly vital crypto market legislation. The CLARITY Act is expected to come to a vote tomorrow for cloture and to open up the bill for debate.
Bill supporter Senator Bernie Moreno posted yesterday that on Tuesday at 2:15 p.m. that the Senate will take its first procedural vote on the Clarity Act.
“This is not a vote on final passage. It is a vote to end debate on whether the United States Senate should even consider a bill to regulate digital assets. We have spent thousands of hours writing a framework so America leads this technology instead of watching it leave. Dozens of Senators have been in the room. It already cleared committee with a bipartisan vote. The House already passed it. A “no” on Tuesday is not a thoughtful objection to a provision. It is a vote to keep an entire industry in the dark with no rules, no American framework, and let it develop overseas. That is an absurd position. If Senators have concerns about the bill, they can offer an amendment after we agree to take it up. That is how the Senate is supposed to work. To my colleagues : vote yes on Tuesday. Consider the bill. Regulate this industry in the United States. Do not hand the future of digital assets to other countries because we failed to do our jobs.”
The legislation passed the US House of Representatives over a year ago, but the Senate has become a bottleneck for a bill that will outline regulatory responsibilities, incorporate investor-protection protections, and provide rules for compliant firms to innovate in the digital asset sector. While the banking sector has raised concerns about new competition, much of the debate is purely political, as key midterm elections will take place in November.
So where does the legislation stand? There has been plenty of chatter in recent days about back-room negotiations, as the mostly Republican supporters seek enough Democrat backing to avoid a filibuster and kill the bill.
On Saturday, Politico shared that President Donald Trump met with staff to discuss ethics language wanted by the Democrats. Part of the issue is Trump family activities in the digital asset sector, which unfortunately creates poor optics for the bill while providing partisan ammunition. Yesterday, Politico reported that Democrats met that night, as the most recent draft incorporates 126 Democratic-requested changes, including aspects affecting ethics and enforcement.
Senator Cynthia Lummis, a key supporter of the bill and a member of the Senate Banking Committee that voted to forward the bill to the full Senate, said the most recent version was the result of “intense daily bipartisan negotiations,” during which the President agreed to tough ethics restrictions.
“[These] ethics provisions holding every federally elected official, judge, and their spouses to some of the toughest ethics restrictions in U.S. history. This new text includes more than 120 of Democrats’ demands. 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. Democrats got what they wanted; now they need to take yes for an answer.”
Senator John Boozman said, “We have an opportunity to establish clear rules of the road that will protect consumers, strengthen our markets, and ensure we remain a global leader in digital asset innovation. We cannot afford to wait any longer.”
Patrick Witt, the White House lead on digital assets explained:
“At every step of the way during the Clarity Act negotiations, the White House and Senate Republicans have been responsive to Democrats’ stated policy objectives. After more than a year’s worth of negotiations, it’s time to pass this bipartisan bill.”
Both sides of the aisle have had to compromise. No legislation is perfect, and perfect cannot be the enemy of the good. If the legislation passes, the US will be better positioned to guide the global digital asset industry while protecting consumers and keeping innovation onshore. If it fails, the Democrats get a win that may undermine Republicans in the midterms, but the country as a whole loses out.
A summary of the changes in the most recent CLARITY Act version is below:
Ethics: State attorneys general can enforce bans on covered people issuing or sponsoring a digital asset, holding a significant financial interest in one, and on exchanges listing assets issued or sponsored in violation of those bans. Covered individuals must sell significant holdings or move them into a qualified blind trust under the Ethics in Government Act of 1978. Civil fines are the greater of 20% of the consideration in the prohibited deal or $500,000 (inflation-adjusted). These rules take effect 360 days after enactment or 60 days after the final rule under section 10102, whichever comes first.
Payment stablecoin yield and rewards: If the Treasury Secretary finds in writing that community banks are losing deposits on a substantial scale, Treasury must issue rules limiting rewards paid to payment-stablecoin holders. That authority sunsets 18 months after enactment.
Blockchain Regulatory Certainty Act: Developers keep existing protections from being treated as money transmitters, money-transmitting businesses, or Bank Secrecy Act financial institutions. References to 18 U.S.C. § 1960 are dropped. The same protections now cover miners and validators.
Agriculture Division: Stronger limits on affiliate trading and conflicts of interest apply to digital commodity exchanges, brokers, and dealers. State consumer-protection laws still apply. Developers get protection without new derivatives-law exemptions and without affecting tribal gaming.