Revised CLARITY Act Targets DeFi Protocols As Senate Gears Up For Critical 60-Vote Test

Senate Republicans circulated a fresh draft of the Digital Asset Market Clarity Act on Thursday, incorporating revisions negotiated during the August congressional recess, ahead of a critical procedural vote scheduled for Tuesday, September 15. 

According to crypto journalist Eleanor Terrett, the amendments preserve the bill’s core structure while introducing notable adjustments to decentralized finance regulation and credit union authority over digital assets.

The most significant revision concerns decentralized finance. Under the updated text, non-decentralized finance trading protocols — those in which identifiable persons or groups retain control over a protocol’s functionality, rules, or consensus — would be required to register with the Commodity Futures Trading Commission (CFTC) and comply with Bank Secrecy Act requirements. This provision mirrors Section 10301 of the Senate Banking Committee’s version and extends regulatory obligations to protocol operators that fail genuine decentralization tests, while explicitly protecting software developers and decentralized governance systems.

The revised bill also narrows the DeFi provisions to spot or cash transactions in digital commodities. This limitation is understood to address concerns raised by tribal governments about blockchain-based prediction markets. A third revision clarifies the authority of credit unions — both federal and insured state-chartered institutions — to engage in crypto-related activities, including custody, staking facilitation, and payments.

The ethics, banking, and stablecoin-yield sections of the draft remain unchanged. Notably, the legislation preserves the ban on certain digital asset transactions by covered officials and maintains the prohibition on digital asset service providers paying interest or yield on payment stablecoin balances, with exemptions for bona fide activity-based rewards.

Road to a Vote Remains Uncertain

Senator Cynthia Lummis, one of the bill’s chief negotiators, stated that more than 114 provisions requested by Democratic colleagues had been incorporated, describing the measure as a strong bipartisan product. She argued that legislation offers the industry a lasting solution that shields it from the “whiplash” of changes in administration, since the CFTC and SEC will write digital asset rules with or without the bill.

However, the path forward is uncertain. The cloture vote on Tuesday will require 60 votes, meaning substantial Democratic support is essential. Democrats have continued to express concern about the lack of a bipartisan ethics agreement restraining President Trump and other senior officials from profiting from crypto businesses. Senator Thom Tillis indicated earlier this week that the White House still needed to engage on a bipartisan ethics proposal, and key Democrats have said they will not support the bill absent such a deal.

White House crypto adviser Patrick Witt urged all senators to support the motion to proceed. Meanwhile, Treasury Secretary Scott Bessent warned that failure to advance would signal that America is unwilling to lead on the future of digital assets and willing to forgo enhanced national security tools to combat their misuse.

Banking groups also remain unsatisfied: the American Bankers Association, the Independent Community Bankers of America, and 77 state banking associations sent an open letter on Thursday calling for greater restrictions on stablecoin rewards. Industry organizations such as the Digital Chamber, whose leader Cody Carbone described the draft as reflecting years of bipartisan negotiation, countered that the Senate must act now or risk ceding U.S. leadership in digital asset innovation to the rest of the world.

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