The U.S. Senate Banking Committee released updated text for the long-debated Clarity Act this week, pushing forward a bill that could establish a broader federal framework for regulating digital assets in the United States. The legislation that unveiled ahead of a key committee hearing, marks another major step in Congress’ years long effort to define how cryptocurrencies should be overseen by federal regulators.
The revised proposal’s intention is to settle one of the crypto industry’s biggest unresolved questions of whether digital assets should fall under securities or commodities laws? Supporters say the bill would reduce regulatory confusion that has driven some crypto firms overseas, while critics warn certain moves could create financial stability and ethics concerns.
The latest Senate draft maintains protections for decentralized finance, or DeFi, developers , a key demand from crypto advocates. It includes language mirroring the Blockchain Regulatory Certainty Act, shielding software developers who do not directly control customer funds from being classified as money transmitters.
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“We are encouraged by the direction of recent negotiations,” the DeFi Education Fund said through a spokesperson, adding that the bill preserves “the most important provisions for developers and infrastructure providers.”
Another contentious issue centers on stablecoin rewards programs. Banking groups have argued that allowing crypto firms to offer yields on stablecoins could pull deposits away from traditional banks and increase systemic risks. Crypto companies, meanwhile, say heavy restrictions would unfairly limit competition.
The draft also leaves an unresolved political dispute over ethics provisions tied to public officials’ involvement in cryptocurrency ventures. Democratic Sen. Kirsten Gillibrand of New York said last week that additional conflict of interest safeguards would likely be necessary to secure broader Democratic support for the legislation.
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White House crypto adviser Patrick Witt said negotiators are working toward rules that apply “across the board, from the president all the way down to the brand new intern on Capitol Hill.”
The Senate Banking Committee is expected to vote on the measure later this week. Even if it clears committee approval, lawmakers would still need bipartisan support in the full Senate, where several Democratic votes are expected to be necessary for passage.
Backers of the legislation say clear, more better crypto rules would help keep innovation and investment in the United States. Some Democratic lawmakers and banking groups, meanwhile, continue to raise concerns about anti-money laundering protections, consumer safeguards and the political influence of the digital asset industry.