The CLARITY Act, a proposed cryptocurrency market structure bill, has undergone significant last-minute revisions as Senate Republicans seek to secure Democratic support for an upcoming procedural vote. The latest version, now 635 pages, includes an ethics framework, revised enforcement authority, and adjustments to the Blockchain Regulatory Certainty Act (BRCA).
A key addition is an ethics framework, which has President Donald Trump’s voluntary agreement. This framework aims to restrict public officials, judges, and their spouses from issuing or sponsoring digital assets, requiring them to divest holdings or place them in a blind trust. This section incorporates elements of the Tillis-Gallego proposal and addresses Democratic concerns about the Department of Justice (DOJ) having sole enforcement authority over ethics provisions, particularly in light of potential conflicts involving President Trump and his family’s financial interests in the crypto sector.
To satisfy Democratic objections, enforcement authority has been expanded to include state attorneys general alongside the DOJ. Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis stated the bill is ready after a year of bipartisan negotiations.
Revisions to the Blockchain Regulatory Certainty Act (BRCA) narrow its scope to primarily cover the Bank Secrecy Act and civil enforcement. Language extending protections to criminal proceedings, including cases under Section 1960, has been removed. However, amendments would still extend BRCA protections to miners and validators.
The bill’s stablecoin yield section now features a “circuit breaker” mechanism, first proposed by Senator Tillis in July. This mechanism would empower federal regulators to intervene if stablecoins trigger significant withdrawals from community banks. Stricter limits on vertical integration have also been introduced, addressing potential conflicts of interest involving digital commodity exchanges, brokers, and dealers, including rules on affiliate trading.
The updated text suggests that state consumer protection laws remain in effect and that developer protections will not override existing regulations for derivatives markets or prediction markets.
Coinbase CEO Brian Armstrong voiced support for the CLARITY Act on September 10, indicating that the company’s primary concerns had been addressed. Armstrong claimed the bill has garnered support from law enforcement groups, banks, and other crypto companies.
The CLARITY Act is scheduled for a procedural vote in the US Senate on Tuesday. Uncertainties remain regarding the extent of Democratic support and the ultimate impact of the revised provisions on the cryptocurrency market structure.
Why This Matters
The materials describe a narrow update: The CLARITY Act has been amended with a 635-page version that includes an ethics framework, revised enforcement authority for the DOJ and state attorneys general, changes to the Blockchain Regulatory Certainty Act (BRCA), a stablecoin yield ‘circuit breaker’ mechanism, and stricter limits on vertical integration. Whether Democrats will ultimately provide sufficient support for the CLARITY Act’s procedural vote.
Broader Context
Source materials place the factual news in this context: The CLARITY Act is a cryptocurrency market structure bill.
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