Senate Revises CLARITY Act Ahead of Crucial Vote on Controlled DeFi Protocols
Senate Republicans have released updated text for the CLARITY Act after negotiations during the August recess.
The revised draft clarifies which DeFi protocols could face CFTC registration, focusing on controlled protocols that appear decentralized but still have identifiable control. Senator Cynthia Lummis said this update specifies when 'decentralized-in-name-only' protocols must register with the CFTC, and she also stated that the text contains more than 100 changes requested by Democrats.
The DeFi provisions now apply only to spot or cash transactions involving digital commodities, a change that separates the framework from broader event-contract disputes while keeping commodity-market oversight in the bill. This addresses one negotiating point without reopening the entire market-structure framework.
Republicans have also added language clarifying when federal and insured credit unions can engage with digital assets, giving them clearer statutory footing as financial institutions expand digital-asset services. However, the stablecoin debate remains open because the latest draft leaves its rewards language largely unchanged, leaving another obstacle before the procedural vote.