The U.S. Senate is due to take its first procedural vote Tuesday on advancing the Clarity Act, but a last-minute Republican rewrite has left its path to the 60 votes needed for further consideration uncertain. The more than 600-page draft, released late Sunday, changes rules on public officials’ crypto conflicts, stablecoin rewards and legal protections for certain blockchain software developers—three issues that have repeatedly stalled negotiations.
The vote would begin the Senate’s formal consideration of the legislation rather than send it to President Donald Trump’s desk. Senate Republicans hold 53 seats, meaning they would need support from at least seven Democrats if all senators vote. Senators Susan Collins and John Cornyn were reported undecided on Monday, leaving the immediate vote count unclear.
The bill seeks to build a federal market-structure framework for digital assets, dividing oversight between the Commodity Futures Trading Commission and the Securities and Exchange Commission. Its central regulatory effect would be to give the CFTC expanded authority over segments of the crypto market while retaining SEC jurisdiction over assets and activities that meet securities-law tests.
New ethics language gives states a limited role
The most politically charged revisions concern restrictions on public officials issuing or sponsoring digital assets. The debate has been closely tied to Trump’s growing crypto business interests, including digital assets associated with World Liberty Financial, a venture run by his sons, and a memecoin tied to his name.
A July version of the Senate negotiations included language barring public officials, government employees and their spouses from issuing or sponsoring digital assets. Enforcement in that draft would have been assigned to the Justice Department.
The Sunday text adds state attorneys general to the enforcement structure, responding to a Democratic request during negotiations. Yet Democratic staff on the Senate Banking Committee said Monday that the Justice Department would still retain the decision over whether to bring an enforcement case.
According to the staff analysis, states could sue the attorney general in an attempt to compel federal action. The Office of Government Ethics would also be able to issue a legal opinion affecting that litigation. The arrangement gives states a pathway to challenge federal inaction, but stops short of giving them a clearly independent enforcement route against a public official.
Senator Mark Warner said Monday that the revised ethics provisions remained inadequate. He said the same major issues had been unresolved for “six, eight weeks,” according to remarks reported by Everett. Senators Ruben Gallego and Angela Alsobrooks had previously said they would not support the bill without ethics language, and neither publicly clarified their position on the new version before the scheduled vote.
A coalition of 18 state law-enforcement officials, organized by New York Attorney General Letitia James, also opposed the latest legislation, arguing that it could weaken state-level powers used to combat consumer fraud.
Developer protections face renewed criticism
The revised draft also changes a provision tied to the Blockchain Regulatory Certainty Act, which is intended to clarify that developers of non-custodial software are not automatically treated as money transmitters.
Non-custodial software allows users to control their own crypto assets rather than placing them with an intermediary. Developers argue they should not face the same compliance obligations as firms that take possession of customer funds or transmit payments.
The latest Senate text removes references to a federal criminal statute that had addressed protections for developers who do not control users’ assets. Coin Center, a cryptocurrency policy organization, said Monday that the revised language “stops short of resolving the essential criminal law issue” now moving through the courts.
Representative Tom Emmer, a Republican who has supported developer protections, also raised concerns about the removal of what he described as a criminal-law “safe harbor,” according to Bloomberg Government reporting. The dispute could become consequential beyond the Clarity Act itself because it affects how prosecutors may interpret existing money-transmission laws when applied to open-source software and decentralized protocols.
Treasury would gain a stablecoin-reward backstop
Stablecoin rewards are the other major remaining fault line. Banks have argued that crypto platforms offering rewards on payment stablecoins could draw deposits away from traditional lenders, particularly smaller community banks. Crypto companies and advocates have opposed broad restrictions, saying they could limit competition and blur the distinction between a stablecoin reward program and a bank deposit product.
The new draft would let the Treasury secretary impose an 18-month “circuit breaker” limiting stablecoin rewards if payment stablecoins cause substantial deposit outflows from community banks. Treasury Secretary Scott Bessent said Monday that he would use that authority if community banks were harmed.
Eight bank trade groups, including the American Bankers Association and the Bank Policy Institute, told Senate leaders that the proposed safeguard would activate only after outflows had occurred. The groups called for language prohibiting reward structures that they say function like deposit interest.
The difference is more than semantic for the bill’s coalition. A preemptive ban would give banks the protection they want, while a Treasury-triggered restriction preserves more flexibility for stablecoin issuers and platforms until evidence of deposit pressure emerges.
A narrow calendar complicates a Senate breakthrough
The new text contains more than 100 edits intended to attract support across party lines, according to the material accompanying the draft. Senator Cynthia Lummis pushed the updated version forward only one day before the procedural ballot, leaving little time for senators to assess the changes or negotiate further amendments.
Even a successful Tuesday vote would leave several legislative hurdles. The Senate would need to pass its own version, and any materially different legislation would need to return to the House for approval. The House is scheduled to be out for the final two weeks of September, potentially delaying a vote until after the November elections.
Cowen Washington Research Group, led by Jaret Seiberg, placed the probability of the Clarity Act becoming law this year at 25%. The uncertain estimate reflects the bill’s compressed calendar as well as the unresolved disputes over ethics enforcement, stablecoin rewards and developer liability.
The revised legislation includes civil penalties for violations of certain provisions of up to 20% of the value of a trade or $500,000, whichever is greater. Those penalties would take effect 360 days after enactment under the draft text.
Tuesday’s procedural vote will show whether the revisions have assembled a workable Senate coalition or merely shifted the arguments among lawmakers, banks, state officials and crypto policy advocates.
For deeper context on U.S. digital-asset rules like the Clarity Act, explore the possible future of crypto regulation in the US now.
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