Senate Republicans have released a revised Digital Asset Market Clarity Act that adds conflict-of-interest rules for public officials and gives the Treasury Department temporary power to restrict some stablecoin rewards if they cause major deposit outflows from community banks. The draft, issued late Sunday ahead of a Tuesday procedural vote, attempts to address Democratic concerns that crypto market-structure legislation could advance without adequate ethics safeguards or bank protections.
Senators Cynthia Lummis of Wyoming, John Boozman of Arkansas, and Tim Scott of South Carolina said the substitute amendment contains 126 substantive changes requested by Democrats. It would replace the text currently before the Senate if lawmakers vote to invoke cloture, the 60-vote procedure needed to move past a filibuster.
The ethics language has particular political weight because President Donald Trump and his family have drawn scrutiny over their cryptocurrency-related business interests, including World Liberty Financial, the USD1 stablecoin and the TRUMP memecoin. A financial disclosure reported more than $1.4 billion in crypto-related income in 2025.
According to the senators, Trump accepted most provisions drawn from the Tillis-Gallego ethics proposal. The provisions would apply to public officials and employees, people elected as president, vice president or members of Congress, and their spouses. State attorneys general would gain a role in enforcing the conflict-of-interest rules.
The rules do not extend their restrictions to other relatives, including an official’s children, leaving a potentially contentious boundary in legislation designed to respond to concerns about elected officials’ financial exposure to digital assets.
Stablecoin rewards become a central banking issue
The updated draft also seeks to draw a line between rewards for using stablecoins and interest paid merely for holding them. Platforms would remain barred from paying interest on idle payment-stablecoin balances, while they could offer rewards linked to a customer’s use of the token.
That distinction has become one of the banking industry’s main objections to stablecoin legislation. The American Bankers Association said in an emailed statement issued before the latest text was published that the rewards language then under consideration was unclear and could invite legal challenges.
Senate Republicans added a temporary “circuit breaker” intended to address the concern that stablecoins could pull deposits away from smaller banks. The measure would authorize the Treasury secretary to impose restrictions on stablecoin rewards when payment stablecoins trigger large withdrawals from community banks. Any restriction would expire 18 months after the law takes effect.
The provision gives Treasury a targeted intervention tool rather than an automatic ban. Its use would depend on regulators determining that stablecoin activity had created the kind of deposit flight that can constrain local lenders’ ability to make loans. The 18-month limit also places the mechanism in an early transition period, when stablecoin rules and bank responses would be tested in practice.
Software developers receive narrower registration rules
Beyond stablecoins and ethics, the substitute amendment would revise the Blockchain Regulatory Certainty Act to narrow money-transmission registration requirements for certain software developers. It would also create a civil safe harbor.
That change addresses a recurring concern among developers of non-custodial crypto software: whether writing or maintaining code could expose them to the same registration obligations as businesses that take control of customers’ assets or transmit funds on their behalf. The revised language is intended to distinguish some software activity from regulated money-transmission services, though its practical reach would depend on the final statutory definitions and future regulatory interpretation.
The draft also incorporates Agriculture Committee guardrails covering affiliate trading and conflicts of interest. It further clarifies circumstances in which state consumer-protection laws would apply. Those provisions place consumer enforcement and market-conduct issues alongside the bill’s proposed federal framework for digital-asset oversight rather than treating the legislation solely as a question of which federal agency regulates particular tokens or platforms.
Tuesday vote will test Democratic support
The immediate challenge is Tuesday’s cloture vote. Republicans hold 53 Senate seats, so the motion would require at least seven Democratic or independent votes if every Republican supports it.
A successful cloture vote would not enact the legislation. Senators could still offer amendments, and the chamber would need to pass the bill before the House could consider the Senate substitute. The process faces a narrow legislative window: the Senate’s tentative 2026 schedule begins a state work period on Oct. 5, while Election Day falls on Nov. 3. House leaders have also canceled the weeks of Sept. 21 and Sept. 28.
Lummis said last week that failure to pass the measure during this Congress could delay it until 2030. That warning reflects the calendar as much as the bill’s complexity. Crypto market-structure negotiations have repeatedly stalled over questions of securities regulation, stablecoin treatment, consumer protection and the role of federal versus state authorities.
Polymarket’s market on whether the legislation will pass this year showed odds rising from about 22% to 32% after the revised text was released, according to the platform’s data. The increase indicates that traders viewed the Democratic concessions as improving the bill’s prospects, while still assigning a greater likelihood that it will not become law before year-end.
The substitute amendment gives Democrats new material to evaluate beyond the bill’s core market-structure provisions: enforceable ethics standards for officials, a state-level enforcement role, limits on stablecoin yield practices and a Treasury backstop for community-bank deposit stress. Whether those additions can produce the seven votes needed on Tuesday will determine whether the Senate begins a full debate or leaves the legislation facing another extended delay.
For deeper context on US crypto oversight and future rules, explore the possible future of crypto regulation in the US.
Disclaimer: The content on this page is provided for general informational purposes only and does not represent the views or financial advice of Toobit. We make no guarantees regarding the accuracy or completeness of this information and shall not be held liable for any errors, omissions, or outcomes resulting from its use. Investing in digital assets involves risk; users should independently evaluate their financial situation and the risks involved. For further details, please consult our Terms of Service and Risk Disclosure.
