Overview
- Senate Republicans circulated a 630-page substitute for the CLARITY Act on Sept. 10–11 that adds new rules saying protocols controlled or materially alterable by people or groups are “non‑decentralized” and subject to CFTC registration.
- The draft narrows its DeFi coverage to spot and cash digital‑commodity transactions and directs the CFTC and Treasury to write implementing rules meant to protect Tribal sovereignty and limit impact on prediction markets.
- Key political disputes remain unresolved, including ethics limits on public officials’ crypto activities that expire in January 2029, caps on stablecoin reward programs, and liability protections for software developers.
- No Democratic senator had publicly backed the revised text at publication, leaving Republicans short of the 60 votes needed on the Sept. 15 cloture motion to move the bill to floor debate.
- If the procedural vote fails, the SEC and CFTC are expected to continue parallel rulemaking as a fallback, which could produce faster but less durable regulation and shape where crypto firms, banks, and users do business.