The U.S. Senate votes Tuesday on whether to advance the Clarity Act after Republicans released final draft text addressing Trump's crypto conflicts of interest, stablecoin rewards and developer protections. Eight banking trade groups say the revised stablecoin rules still fall short, while Democrats question whether the bill's ethics language can actually be enforced.
Senate Republicans released a final draft of the Clarity Act late Sunday, and the chamber votes Tuesday on an initial procedural motion to advance the bill. It is unclear whether the new text has secured enough support: TD Cowen's Washington Research Group still gives the Clarity Act just a 25% chance of becoming law this year, partly because the bill would still need to clear the House.
Banks say stablecoin rules still fall short
Eight banking trade groups, including the American Bankers Association and the Bank Policy Institute, wrote to Senate leaders John Thune and Chuck Schumer on Monday asking Congress to tighten the Clarity Act's stablecoin rewards restrictions. The groups want language removed that would let payment stablecoin rewards depend on a customer's balance, duration or tenure. They say that language appears to contradict the bill's own prohibition on interest-like payments.
The revised bill also gives the Treasury secretary authority to impose an 18-month "circuit breaker" on stablecoin rewards if payment stablecoins trigger substantial deposit outflows from community banks. But the trade groups called that safeguard too slow, since it would only activate after deposit flight has already occurred. White House crypto adviser Patrick Witt pointed to the Treasury's added authority, and according to The Block: "What more do you want?"
Ethics language divides Democrats
The latest draft gives state attorneys general a role in enforcing conflict-of-interest rules for public officials, a change meant to answer a key Democratic demand tied to President Trump's crypto holdings. Yet Sen. Elizabeth Warren's staff argue the provision would not stop Trump from profiting further, since enforcement still runs through the Justice Department and Trump's own Office of Government Ethics could shut down a state lawsuit.
Sens. Ruben Gallego and Angela Alsobrooks have said they won't back the bill without stronger ethics language, and Sen. Mark Warner said the new provision still isn't enough. The bill also revises SEC and CFTC jurisdiction over digital assets, but Republicans removed a reference to a federal criminal statute that had protected non-custodial software developers, a change the Coin Center said falls short of resolving the underlying criminal-law issue.
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