Revised CLARITY Act Tacks On Ethics Rules and Stablecoin Restrictions

The US Senate Republicans have released a revised version of the CLARITY Act, which combines market rules and new regulations for crypto markets. The draft stays faithful to its central intent: dividing responsibility between the SEC and CFTC.

New ethics rules have been added, restricting senior government officials, elected politicians, and their spouses from accepting payments to issue or sponsor a digital asset. Individuals with a material interest in a crypto company would be required to sell their interest or place it in a blind trust.

The draft legislation also includes changes related to stablecoin issuers and regulatory oversight under the GENIUS Act. Stablecoin rewards, connected to loyalty programs, remain permitted but can be temporarily restricted by the Treasury secretary if they cause substantial withdrawals of deposits from community banks.

The new version removes the anti-CBDC title and alters aspects of developer protections. Miners and validators now gain legal protection from being classified as money transmitters or financial institutions by default. Exchanges would face limits on trading for their own benefit, and conflict of interest rules would be put in place.