Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis, alongside Chairmen John Boozman and Tim Scott, released a 635-page revised proposal for the CLARITY Act on Sunday. This document serves as a final offer to Democrats ahead of a procedural vote scheduled for Tuesday at 2:15pm ET. The updated text incorporates changes to government officials' involvement with digital assets, stablecoin yield regulations, and the Blockchain Regulatory Certainty Act (BRCA). Lummis stated that President Trump voluntarily agreed to unprecedented ethics restrictions holding federal officials, judges, and their spouses to strict standards.
The revised bill includes 126 changes requested by Democrats after a year of bipartisan negotiations. New ethics provisions allow state attorneys general to enforce bans on federal officials issuing or holding significant financial interests in digital assets, requiring divestment or blind trusts for covered individuals. Violations carry civil penalties of $500,000 or 20% of the prohibited transaction amount, whichever is greater. Additionally, the Treasury Secretary would gain authority to restrict stablecoin rewards if community banks lose substantial deposits, though this power expires 18 months after enactment. The BRCA updates extend protections against money transmitter classifications to miners and validators while removing references to Section 1960 of Title 18.
This legislative move represents a critical juncture for US crypto market structure, attempting to balance institutional adoption with stringent regulatory oversight. By integrating ethics restrictions directly into the bill, Republicans aim to neutralize Democratic concerns regarding conflicts of interest among public officials. The inclusion of specific enforcement mechanisms, such as state attorney general authority and defined civil penalties, signals a shift toward concrete compliance frameworks rather than abstract guidelines. These provisions address long-standing criticisms about the lack of clear boundaries between personal financial interests and public policy decisions in the digital asset sector.
From a Market Structure perspective, the expansion of BRCA protections to miners and validators provides necessary legal certainty for infrastructure providers previously exposed to ambiguous classification risks. However, the temporary nature of the stablecoin yield restriction authority introduces regulatory uncertainty for issuers and community banks alike. Observers should monitor whether the 35% Polymarket odds reflect genuine legislative momentum or merely speculative sentiment, as the procedural vote outcome will determine if these detailed compliance measures advance to floor consideration.
