Senate Republicans Table Final CLARITY Act Proposal Ahead of Key Vote

Republican senators have released updated text of the CLARITY Act, positioning it as their final offer to Democrats before an expected procedural vote. The revised legislation incorporates significant changes to digital asset regulation frameworks across multiple domains.

Ethics Provisions Secure Trump's Approval

The new text includes modified ethics proposals backed by former President Donald Trump. Approximately 80% of the bipartisan Tillis-Gallego proposal was adopted, requiring officials to divest substantial cryptocurrency holdings or place them in blind trusts. State attorneys general will now have enforcement authority over these ethics rules—a provision previously opposed by the White House.

Narrowed Scope for Blockchain Regulation

For the Blockchain Regulatory Certainty Act (BRCA) provisions, the updated language limits applicability to the Bank Secrecy Act and civil enforcement. Language extending protections to criminal cases, including lawsuits under Section 1960, has been removed entirely.

"Circuit Breaker" Mechanism for Stablecoins

A new oversight mechanism proposed by Senator Tillis in July has been added to address systemic risks from stablecoins. Federal regulators may intervene when significant migration of community bank deposits to stablecoins is detected, with Treasury Secretary Besant holding ultimate decision-making authority.

Tightened Vertical Integration Restrictions

The legislation strengthens restrictions on vertically integrated digital asset operations, specifically addressing:

  • Related-party transactions involving digital commodity trading platforms, brokers, and dealers
  • Conflicts of interest prevention measures
  • Continued applicability of state consumer protection laws

The text also clarifies that developer protections don't qualify for derivatives law exemptions and won't affect existing prediction market regulations.

Regulatory Chess in Election Season

Republican lawmakers describe this version as their "last, best, and final" proposal before Tuesday's procedural vote. Analysts note the revisions reflect ongoing attempts to balance regulatory clarity, market stability, and consumer protection in digital asset governance. With the 2024 election approaching, cryptocurrency policy may emerge as a key battleground in congressional negotiations.