Senate Democrats were preparing a counterproposal to the latest Republican revision of the CLARITY Act ahead of a procedural vote scheduled for Tuesday, placing stablecoin rules and bank-deposit protections at the center of the next congressional test for U.S. crypto market legislation.
Sen. Mark Warner said Democrats involved in the negotiations planned to coordinate their position during a Monday night meeting. The discussions follow an updated version of the bill that includes a proposed “circuit breaker” intended to address concerns that stablecoin issuers or related platforms could draw deposits away from traditional banks.
Eight banking trade groups told Senate leaders that the provision would provide limited protection in practice. In their letter, the groups argued that the mechanism would activate only after significant deposit outflows had already occurred, rather than creating an early safeguard against rapid movement of funds from bank accounts into stablecoin products.
The groups also asked lawmakers to tighten language covering stablecoin “rewards.” Their concern is that a poorly defined exemption could allow stablecoin holders to receive payments that resemble interest, potentially giving stablecoin issuers and affiliated platforms a way to compete with bank deposits while avoiding rules that apply to conventional savings products.
Tuesday vote tests the Senate’s negotiating room
The planned floor action appears to be an initial procedural hurdle rather than a final vote on the CLARITY Act. Even so, it will show whether lawmakers can assemble enough support to move negotiations forward amid disagreements over market structure, stablecoin payments and the division of regulatory authority.
The bill is designed to establish a clearer federal framework for digital-asset markets, including which tokens and activities would fall under securities or commodities regulation. Its stablecoin provisions have become especially contentious because they touch on deposit funding, payment systems and the ability of token issuers to offer financial incentives to users.
Banking groups have long argued that stablecoin rewards could weaken the separation between insured bank deposits and token-based payment instruments. Crypto advocates, meanwhile, have pushed for rules that permit stablecoin issuers and intermediaries to compete without treating every token-related payment as a bank product.
Democrats’ planned counterproposal suggests those differences remain unresolved. A revised Democratic position could seek more restrictive definitions of rewards, stronger consumer protections or earlier intervention thresholds for any deposit-outflow controls.
SEC prepares rules with or without legislation
Securities and Exchange Commission Chair Paul Atkins said the agency would continue developing its crypto regulatory agenda regardless of whether Congress passes the CLARITY Act.
Atkins said the SEC’s “Project Crypto” initiative includes work on a proposed framework called Regulation Crypto Assets, or Reg CA. The agency is also examining updates to transfer-agent rules that would recognize blockchain-based ownership records and developing custody standards for crypto assets held by investment advisers and regulated funds.
Those projects address operational issues that have often slowed institutional use of tokenized securities and crypto-related investment products. Transfer agents maintain records of securities ownership, while custody rules govern how regulated firms safeguard client assets. Adapting both areas for blockchain systems could give firms clearer parameters for using distributed ledgers in regulated financial products.
The SEC’s approach also means that congressional deadlock would not leave the sector without policy movement. Agency rulemaking tends to move more slowly than legislation and can face court challenges, but it can set practical standards for advisers, funds, brokerages and service providers before Congress completes a comprehensive market-structure law.
House committee to consider bitcoin reserve bill
A separate House Financial Services Committee session scheduled for 10:00 a.m. Eastern Time on Sept. 16 is set to consider H.R. 8957, the “2026 U.S. Reserve Modernization Act.”
The bill was introduced by Rep. Nick Begich and has Rep. Jared Golden as its only Democratic co-sponsor. It would direct the Treasury Department to establish a strategic Bitcoin reserve and create a separate digital-asset reserve for cryptocurrencies other than Bitcoin.
Under the bill’s described terms, Bitcoin obtained through federal forfeiture proceedings and meeting the law’s requirements would be transferred into the strategic reserve. Non-Bitcoin assets obtained by the government could be held separately, while proceeds from their sale or exchange could be used to acquire more Bitcoin or repay federal debt.
The proposal would also require the Treasury and Commerce departments to study budget-neutral ways to obtain additional Bitcoin over a five-year period. The text says the plan would not authorize borrowing, tax increases or deficit spending for Bitcoin purchases.
That structure would place forfeited digital assets at the foundation of a federal reserve rather than immediately sending all holdings into liquidation. It also draws a policy distinction between Bitcoin and other seized tokens: Bitcoin could become a long-term reserve asset, while other assets could be converted into Bitcoin or used to reduce government obligations.
The measure faces a different political challenge from the CLARITY Act. A market-structure bill aims to define rules for private-sector activity, while a strategic reserve proposal would commit the federal government to holding a cryptocurrency asset as part of its own balance-sheet policy.
Corporate and token developments continue
Outside Washington, Robinhood co-founder and Chief Executive Officer Vlad Tenev said the company expects its stock-token offering to add physical redemption and voting features. Physical redemption would allow eligible holders to convert a tokenized representation into the underlying asset, while voting functionality could connect token holders with shareholder governance processes.
Crypto market-data provider Kaiko also expanded its latest financing round to $110 million, led by S&P Global. The participating firms included DRW Holdings, Susquehanna, Royal Bank of Canada, Nasdaq, BNP Paribas, Bpifrance, Broadridge, Canton Ventures, Stellar and Coinbase Ventures.
Kaiko previously raised $53 million in a June 2022 Series B led by Eight Roads. The larger financing signals continued demand for institutional-grade pricing, trade and blockchain data as regulated financial firms build systems for digital assets and tokenized products.
World Liberty Financial-related blockchain activity also showed an allocation matching President Donald Trump’s previously disclosed WLFI holdings entering a vesting contract in May. The contract initially received 15.75 billion WLFI, then reflected a 10% burn that reduced the balance to 14.175 billion tokens. The schedule imposes a two-year lockup followed by gradual releases over three years, putting the earliest potential unlock in 2028.
The combination of Senate negotiations, SEC rulemaking and the House reserve proposal leaves U.S. crypto policy moving on several tracks at once. The immediate test comes with the Senate’s procedural vote, where disagreements over stablecoin incentives and bank safeguards could determine whether the CLARITY Act advances or returns to another round of negotiations.
For deeper context on U.S. crypto regulation shifts, explore this analysis on evolving policy and oversight.
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