CLARITY Act Fails to Gain Traction as Key Senators Demand Tighter Stablecoin Rules
The CLARITY Act, which aims to regulate stablecoins and address ethics concerns in cryptocurrency, still needs 11 more Senate votes to pass. On September 15, it received a procedural vote of 49-50, falling short of the required 60 votes. However, four Republican senators who voted 'Yes' on that motion have since signed onto an amendment seeking stricter stablecoin restrictions.
Senators John Cornyn, John Curtis, Cindy Hyde-Smith, and Lisa Murkowski all supported the CLARITY Act's procedural vote but also signed onto Senator Jerry Moran's amendment. This amendment would replace the bill's current standard for prohibited stablecoin rewards with broader language covering anything 'substantially similar to the manner in which depository institutions pay interest or yield.'
The banking industry has been pushing for this change, arguing that a stablecoin reward routed through an exchange, affiliate, or loyalty program can function economically like deposit interest under a broader definition. Community banks worry about losing deposits to such products.