New Draft of Crypto Clarity Act Circulates Ahead of Vote

Bitcoin Magazine

Updated Crypto Clarity Act Starts Circulating Days Before Key Vote

A freshly revised draft of the long-anticipated crypto Clarity Act has emerged, featuring several notable amendments.

As initially broken by Eleanor Terrett of Crypto in America and Brendan Pedersen from Punchbowl, the revised legislation introduces mandates requiring non-decentralized DeFi protocols to register with the CFTC, alongside adjustments regarding how credit unions handle cryptocurrency operations, according to reporters.

Specifically, the text outlines that a decentralized finance application fails the decentralized protocol standard if an individual can control or materially alter its functionality, if it fails to operate solely on pre-established transparent encoded rules, or if any party has the ability to restrict or censor its usage.

Additionally, the updated text allows a federal credit union to utilize digital assets or distributed ledger technology to execute, offer, or deliver any activity, function, product, or service that it is already authorized by law to provide.

Legislators had originally hoped to hold a crucial floor vote on the crypto market structure bill in August ahead of a five-week recess. That vote was subsequently postponed, and the Senate is now scheduled to take it up on September 15.

Reporters note that the legislation has not yet achieved bipartisan support. Senate Republicans began distributing the updated version on Thursday.

The Clarity Act establishes a regulatory framework to clearly split oversight responsibilities among regulators by defining which digital assets qualify as securities, commodities, or stablecoins—rules that crypto industry executives have advocated for over a prolonged period.

Although the House of Representatives passed the measure last July, its progress stalled throughout the year largely due to friction between the banking lobby and crypto firms concerning the payment of stablecoin yields to customers.

In July, an alternate draft addressing ethical considerations began circulating, which would prohibit government officials from promoting or profiting from digital assets—a point of criticism that Democrats have directed at the Trump family.

Despite these modifications, a bloc of Democratic lawmakers argued the measure remains inadequate and have insisted on further amendments.

Meanwhile, pro-crypto legislators have sharply criticized Democratic politicians whom they accuse of intentionally obstructing the bill.

President Donald Trump has strongly encouraged lawmakers to finalize the legislation. Back in August, he stated that passing this “very, very powerful legislation” is essential for the United States to maintain its status as the “undisputed leader in Bitcoin and crypto.”

Frequently Asked Questions

When is the Senate vote scheduled for the updated Clarity Act?

The Senate is scheduled to vote on the bill on September 15.

What new requirements does the updated bill introduce for DeFi protocols?

Non-decentralized DeFi protocols are now required to register with the CFTC if they fail specific decentralization criteria.

How does the bill affect federal credit unions?

The updated legislation specifies that federal credit unions may use a digital asset or distributed ledger system to deliver any activity, product, or service they are already authorized by law to perform.

Has the Clarity Act achieved bipartisan support?

No, the bill is not yet bipartisan, and Senate Republicans began circulating the updated legislation on a Thursday.