Senate Republicans led by Sen. Cynthia Lummis released a revised, 630-page version of the Clarity Act crypto market structure bill on Thursday, just days before a procedural vote scheduled for Sept. 15, 2026. The new text adds registration requirements for what it calls “non-decentralized finance trading protocols,” which would need to register with the Commodity Futures Trading Commission under rules the CFTC and Treasury Department would jointly write. The move matters because the Clarity Act, if passed, would establish the first comprehensive federal framework for regulating digital assets in the United States.
A Bill Years in the Making
The Clarity Act has been stalled repeatedly over the past year, tripped up by disagreements over how to tax stablecoin rewards, concerns about illicit finance risks, and — most persistently — how to handle President Trump’s own crypto holdings tied to World Liberty Financial and the TRUMP memecoin. As detailed in earlier coverage of the make-or-break vote facing the Senate, the legislation has become a proxy battle over both market oversight and government ethics.
In July, Trump agreed to an ethics provision that would bar administration officials from issuing digital assets, with enforcement resting with the Justice Department rather than state attorneys general. That arrangement drew objections from Democrats and from Republican Sen. Thom Tillis, who floated alternative ethics language. The new draft keeps the core dispute unresolved: the ethics provision is set to expire in January 2029, meaning it would sunset roughly at the end of the current presidential term, a timing detail critics are likely to scrutinize closely.
The revised bill also folds in 114 provisions requested by Democrats, a sign that negotiators tried to widen support before the procedural vote. Yet reporting cited in the underlying facts indicates the latest version still lacks the Democratic backing needed for passage in a Senate where bipartisan votes are required to clear procedural hurdles. That gap is notable given that Treasury Secretary Scott Bessent has personally pushed lawmakers to revive the bill, as covered in a separate report on administration pressure for a Senate deal.
What the New DeFi Rules Would Do
The most substantive addition in the revised text targets decentralized finance. Trading protocols that regulators determine are not sufficiently decentralized would be required to register with the CFTC, and the agency would work with Treasury to write detailed implementing rules. This is a meaningful shift: rather than treating all DeFi protocols as exempt from traditional market-intermediary regulation, the bill would create a category for platforms that look decentralized on paper but function more like centralized trading venues in practice.
The bill’s drafters also moved to narrow the scope of these provisions, clarifying that they apply only to spot and cash digital commodity transactions. That language appears aimed at addressing concerns raised by tribal governments about prediction markets, which have become a flashpoint in broader gaming and betting jurisdiction disputes. Separately, the revised text updates rules governing how credit unions can engage in crypto-related activities, extending the bill’s reach beyond exchanges and trading firms into traditional depository institutions.
For an industry that has spent years operating without clear federal rules, even a contested draft signals where lines are being drawn. Firms building infrastructure around tokenized assets and stablecoins — from custody arrangements to reserve management, such as the tokenized cash products recently introduced for stablecoin reserves — have a direct stake in how DeFi registration thresholds are ultimately defined, since ambiguity about what counts as “sufficiently decentralized” has long been a source of legal risk.
What Comes Next
The immediate marker to watch is the Sept. 15 procedural vote itself. Because the bill reportedly still lacks sufficient Democratic support, the vote could stall again, forcing another round of revisions rather than a clean path to floor debate. Observers should watch for:
- Whether Democratic senators publicly respond to the 114 incorporated provisions, and whether that changes vote counts.
- Any further changes to the ethics provision’s enforcement mechanism or its 2029 expiration date, given continued objections from Sen. Tillis and Democrats.
- How the CFTC and Treasury approach rulemaking timelines for non-decentralized finance trading protocols if the bill advances.
- Reactions from tribal governments regarding the narrowed scope on spot and cash transactions versus prediction markets.
Sen. Lummis, one of the bill’s chief architects, is set to leave Congress in January 2027, adding a layer of urgency to her push for passage before her term ends. Whether this revised draft becomes the version that finally clears the Senate, or simply the latest iteration in a year-long back-and-forth, will become clearer once the procedural vote results are known.
Source: The Block
This content is for informational purposes only and does not constitute financial or investment advice.
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