U.S. Senate Republicans have released a revised draft of major cryptocurrency legislation, aiming to address concerns from Democrats regarding ethics provisions and banking industry worries about lending. The proposed Clarity Act, which seeks to establish a comprehensive regulatory framework for cryptocurrencies, had previously stalled amidst objections over insufficient ethics and illicit finance safeguards, alongside fears it could destabilise the banking system by fostering deposit competition.
Senators Cynthia Lummis, John Boozman, and Tim Scott confirmed that the new text incorporates 126 substantive changes requested by Democrats. A key focus of these revisions is strengthening restrictions on public officeholders profiting from their own crypto ventures. This effort partly targets entities such as World Liberty Financial, a cryptocurrency venture associated with Donald Trump’s sons. The new language explicitly bans political officials from benefiting from their personal crypto holdings and grants state attorneys general enhanced powers to enforce these restrictions, though some Democrats remain sceptical of their efficacy.
Despite these amendments, the banking industry continues to oppose the bill, particularly provisions allowing crypto companies to offer rewards on stablecoins. Bank trade groups argue that such incentives could lead to a significant outflow of deposits from traditional banks, thereby hindering their capacity to extend credit to customers. With a crucial procedural vote scheduled for Tuesday, it remains uncertain whether the revised Clarity Act has garnered sufficient bipartisan support to pass the 60-vote threshold required for advancement, despite the crypto industry’s extensive lobbying efforts.
