Updated Crypto Clarity Act Starts Circulating Days Before Key Vote
Bitcoin Magazine Updated Crypto Clarity Act Starts Circulating Days Before Key Vote A new draft of the long-awaited bill has been circulated by Senate Republicans. This post Updated Crypto Clarity...
As first reported by Eleanor Terrett from Crypto in America and Punchbowl’s Brendan Pedersen, the updated bill contains changes including requiring non-decentralized DeFi protocols to register with the CFTC, and changes around how credit unions deal in crypto, according to reporters.
The specifics include that a decentralized finance app fails the test of being such a protocol test if someone can control or materially alter its functionality, if it doesn’t run solely on pre-established transparent encoded rules, or if someone can restrict or censor its use.
It also adds that a federal credit union may use a digital asset or distributed ledger system to perform, provide, or deliver any activity, function, product, or service it is otherwise authorized by law to perform.
JUST IN: 🇺🇸 An updated version of the Clarity Act has released ahead of next week's floor vote 👀"Latest changes include new DeFi requirements and credit union fix" — Punchbowl NewsPass it 🚀 pic.twitter.com/uYntehREqI
Lawmakers were hoping a crucial vote on the crypto market structure bill would go ahead in August before their five-week recess. It was delayed and the Senate will now vote on it on September 15.
The bill is not bipartisan yet, according to the reporters. Senate Republicans started circulating the updated legislation on Thursday.
The Clarity Act drafts a framework to formally divide oversight between regulators, distinguishing which digital assets are securities, commodities or stablecoins. Crypto industry executives have long called for such rules to be in place.
Though passed by the House of Representatives last July, it has been stalled this year, mostly because the banking lobby clashed with crypto companies over paying customers stablecoin yield.
A new draft tackling the issue of ethics started circulating in July, banning government officials from promoting or making money from crypto — something Democrats have criticized the Trump family for doing.
Despite the changes, a group of Democrats said the bill fell short and demanded amendments to the bill.
Pro-crypto lawmakers have blasted Democratic politicians who they think are deliberately holding back the bill.
President Donald Trump has urged lawmakers to get the legislation over the line. In August, he said that in order for the U.S. to remain the “undisputed leader in Bitcoin and crypto,” they had to pass the “very, very powerful legislation.”
Asanat Analysis — Why it matters
The Clarity Act's updated draft signals imminent regulatory codification of crypto's market structure—a threshold moment after years of jurisdictional ambiguity. The new DeFi definition (requiring true decentralization: no single point of control, transparent rules, no censorship capability) effectively creates a regulatory safe harbor for genuinely decentralized protocols while bringing centralized DeFi platforms under CFTC purview. This mirrors how SEC/CFTC already regulate traditional finance but formalizes it for digital assets. The credit union amendment removes a banking-sector obstruction, suggesting the stablecoin yield dispute that stalled the bill may be nearing resolution.
A September 15 vote represents political will finally aligning with crypto industry demands. However, the lack of bipartisan consensus and Democratic pushback on ethical provisions indicate this remains contested. The timing—with Trump in office—matters: his explicit advocacy removes one historical veto threat, but a partisan vote weakens the bill's durability if power shifts. The real second-order effect: once regulatory clarity passes, it anchors institutional adoption timelines and reduces the regulatory risk premium priced into crypto assets. Passage doesn't eliminate SEC enforcement risk around specific tokens, but it establishes the formal framework institutions have required before scaling exposure.