Senate Republicans Revise Clarity Act Ahead of September 15 Vote

Senate Republicans have released an updated version of the Clarity Act, introducing new requirements for crypto trading protocols that claim decentralization while remaining controlled by identifiable people or organizations.

Sen. Cynthia Lummis of Wyoming unveiled the revised 630-page legislation on Thursday, just days before a critical procedural vote scheduled for September 15.

The Clarity Act seeks to establish a comprehensive federal framework for digital asset markets while defining the respective regulatory responsibilities of the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC).

One of the most significant changes addresses what Lummis described as “decentralized-in-name-only” DeFi protocols. Platforms that can still be controlled or materially altered by individuals or groups could be required to register with the CFTC.

DeFi Rules Narrowed in Updated Draft

The revised legislation directs the CFTC and Treasury Department to develop rules for controlled trading protocols, creating a clearer distinction between genuinely decentralized systems and platforms with identifiable operators.

Lummis said the DeFi provisions have also been narrowed to spot and cash transactions, partly in response to concerns surrounding prediction markets.

According to Lummis, the updated legislation includes more than 100 changes requested by Democrats during negotiations throughout August.

If enacted, the broader legislation would establish clearer rules for much of the U.S. cryptocurrency industry, including determining when digital assets fall under SEC or CFTC jurisdiction and creating a more defined pathway for crypto companies conducting token sales.

Ethics Rules Remain Largely Unchanged

While the DeFi language has changed, the bill's ethics provisions remain largely consistent with the previous July draft.

Those provisions would prohibit public officials, government employees and their spouses from issuing or sponsoring digital assets.

Democrats have pushed for broader restrictions addressing President Donald Trump's cryptocurrency interests, creating one of the most politically sensitive points surrounding the legislation.

According to Politico, Democrats had not committed to supporting the revised bill following its release.

That creates uncertainty ahead of the September 15 procedural vote, which is increasingly being viewed as a decisive moment for the long-running crypto market structure legislation.

Lummis has urged Democrats to support the updated bill, arguing that Republicans incorporated many of the changes requested during negotiations.

Stablecoin Yield Remains Major Battleground

Another unresolved dispute involves stablecoin yield and rewards, which has triggered intense lobbying from both the cryptocurrency industry and community banks.

Crypto advocates argue that overly restrictive rules could limit competition and prevent consumers from benefiting from stablecoin-based financial products. Banking groups, meanwhile, have raised concerns that rewards offered on stablecoin balances could pull deposits away from traditional banks.

The debate has increasingly moved beyond Washington.

Industry advocacy organization Stand With Crypto said supporters contacted members of Congress nearly 50,000 times during August, while banking groups have also pressured lawmakers in their home states to modify the rewards provisions.

The issue could prove important in determining whether the legislation can secure enough support to advance.

September 15 Vote Becomes Critical Test

Lummis argues that Republicans have already made substantial concessions during negotiations, including Democratic requests involving fraud-related restrictions, additional CFTC funding and stronger oversight of centralized crypto platforms.

She specifically pointed to provisions including a felony bar for fraudsters and $150 million in funding for the CFTC.

The September 15 procedural vote will now test whether those compromises are sufficient to move the Clarity Act forward.

The stakes are significant for the U.S. crypto industry. A successful bill could finally establish clearer boundaries between the SEC and CFTC while creating a federal framework covering crypto trading, token issuance and certain DeFi activities.

Failure to advance the legislation, however, could once again delay comprehensive U.S. crypto market structure reform after months of negotiations.

With disagreements over DeFi oversight, political ethics and stablecoin rewards still unresolved, the revised Clarity Act enters its crucial Senate vote with its future far from guaranteed.