The Senate holds a procedural vote Tuesday on the CLARITY Act after Republicans released a final, 635-page draft with new ethics and stablecoin provisions. New York Attorney General Letitia James is leading a group of bipartisan attorneys general urging senators to reject the bill, while banking groups say its stablecoin language still needs work.
Senate Republicans released a final, 635-page draft of the CLARITY Act late Sunday ahead of Tuesday's procedural vote, adding ethics and banking provisions meant to win over Democrats. The bill needs 60 votes to break a filibuster, meaning at least seven Democrats must vote yes with full attendance. It cleared the Senate Banking Committee in May but has stalled since as leaders worked to secure that support.
Republican sponsors say the update meets most Democratic objections. Sen. Cynthia Lummis, R-Wyo., said the revised text includes more than 120 of Democrats' demands. "Democrats got what they wanted; now they need to take yes for an answer," Lummis said.
Sen. Bernie Moreno, R-Ohio, stressed that Tuesday's vote is not a vote on final passage, but a vote to end debate on whether the Senate should even take up the bill.
Trump accepts most of the ethics deal
The draft folds in an ethics agreement brokered by Sens. Thom Tillis and Ruben Gallego. According to the Associated Press, Trump has agreed to accept about 80% of the proposal, which would require officials to divest significant crypto holdings or place them in a blind trust. The revised text also lets state attorneys general enforce those ethics rules, a change from earlier drafts that gave that role only to the federal Justice Department.
State attorneys general push back
Still, New York Attorney General Letitia James led 17 bipartisan attorneys general in a Monday letter urging senators to vote against the bill. James said the Clarity Act would potentially strip attorneys general of their authority to protect investors from fraud. Attorneys general from California, Illinois, Arizona, Kansas, Ohio and Wisconsin, among others, also signed the letter.
The group additionally warned that the bill would let the SEC preempt state securities registration authority, a change the letter called an unprecedented grant of authority.
Stablecoin rewards face a temporary limit
Banks, led by the Independent Community Bankers of America, oppose the bill's stablecoin yield provisions, warning they could pull deposits from community lenders. The final draft gives the Treasury secretary authority to restrict stablecoin rewards for 18 months if the payments trigger substantial deposit outflows from community banks. Yet the American Bankers Association and nearly 80 other banking groups had pushed for stronger limits, and the group says the update does not resolve all its concerns.
It remains unclear whether lawmakers would have enough time to amend and repass the bill in this Congress should Tuesday's vote fail.
Sources: CNBC, The Block, Crypto Daily
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