Clarity Act Revised Ahead of Key Senate Vote on Digital Asset Regulation

A revised version of the Clarity Act, a bill aimed at regulating digital assets in the US, has been released by Senate Republicans ahead of a crucial vote on September 15. The updated bill includes new rules for 'non-decentralized finance trading protocols,' which are entities where an individual or group can control or alter how a protocol operates.

These entities would be required to register with the Commodity Futures Trading Commission (CFTC), and the CFTC and Treasury Department would need to write specific rules around them. DeFi provisions in the bill have been narrowed to apply only to spot and cash digital commodity transactions, which is intended to ease concerns from tribal governments about the potential impact on prediction markets.

Despite the changes, the bill still faces a major obstacle: Democrats say the ethics section does not go far enough. The current ethics language bars public officials and their spouses from issuing or sponsoring digital assets, with enforcement handled by the Justice Department. It is set to expire in January 2029.