- The revised CLARITY Act would require centrally controlled DeFi trading protocols to register with the CFTC.
- Lummis says the draft incorporates more than 114 provisions requested by Democrats.
- Ethics and stablecoin disputes complicate negotiations ahead of the September 15 procedural vote.
Senate Republicans released a revised CLARITY Act on September 10, proposing registration requirements for centrally controlled DeFi trading protocols. The 630-page draft arrives ahead of a September 15 procedural vote.
Senator Cynthia Lummis said the changes reflect negotiations with Democrats during August. However, unresolved ethics protections and stablecoin disagreements leave the bill without a settled bipartisan agreement.
CLARITY Act Draft Targets DeFi Protocols Under Central Control
According to a Politico report, the revised CLARITY Act focuses on who can control a trading protocol, rather than how its developers describe it. People acting together could fall within its scope if they can materially change operations, functionality or consensus rules.
Such protocols would face CFTC registration, with the commission and Treasury tasked with developing implementing rules. The proposal therefore distinguishes genuinely decentralized systems from platforms where identifiable parties retain meaningful authority.
Another CLARITY Act revision limits the relevant DeFi provisions to spot and cash digital commodity transactions. Lummis said this addresses tribal government concerns about prediction markets.
The draft also clarifies how credit unions can conduct crypto activities. Lummis said lawmakers incorporated more than 114 provisions Democrats requested.
Ethics and Stablecoin Disputes Complicate Senate Support
Those additions do not establish Democratic backing for the complete CLARITY Act. Negotiators still lack an agreed ethics framework addressing public officials and digital assets.
The latest language retains the Justice Department as the lead enforcement authority. Democrats previously challenged an earlier proposal, while an alternative involving Senator Thom Tillis has not yet produced an announced agreement.
The September 15 vote concerns advancing the legislation through a procedural hurdle. It would not itself enact the CLARITY Act or guarantee final passage.
Banking groups also continue challenging stablecoin rewards as lobbying intensifies ahead of the vote. They argue that competing yields could pull deposits from banks and weaken their lending capacity.
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