The Senate Banking Committee has released the latest 309-page version of the Clarity Act ahead of a crucial markup vote this week, reviving momentum for what could become the first comprehensive federal framework governing the US crypto industry. According to committee Chair Tim Scott, the revised text followed months of negotiations between lawmakers, crypto firms, and banking lobby groups over stablecoin rules, DeFi protections, and oversight standards tied to digital asset markets. In a statement released alongside the bill, Scott said the proposal delivers “certainty, safeguards, and accountability” while keeping financial innovation in the United States. Scheduled for committee markup on Thursday, the legislation arrives after an earlier January vote collapsed when Coinbase withdrew support over restrictions tied to stablecoin rewards. Negotiators later revisited the language, eventually producing a compromise that now blocks passive yield paid solely for holding stablecoins while permitting certain activity-based incentives linked to payments and platform use. At the same time, banking groups remain unconvinced that the revised language goes far enough. In a letter circulated to bank executives over the weekend, American Bankers Association CEO Rob Nichols warned the current draft could encourage deposits to move from traditional banks into stablecoins, potentially weakening lending capacity and financial stability. Other banking lobby organisations have reportedly continued pressing senators to tighten reward restrictions before Thursday’s hearing. Support from the crypto industry, however, appears far more coordinated than during the failed January attempt. During a live discussion on X earlier this week, Brian Armstrong said not every participant “got everything they wanted,” but described the compromise as preserving the industry’s core priorities. Armstrong also said Coinbase is working with several major global banks on crypto integration efforts. What has changed in the latest draft? Included in the updated text is language tied to the Blockchain Regulatory Certainty Act, a provision strongly backed by decentralised finance advocates. The measure clarifies that software developers and infrastructure providers who do not control customer funds should not be treated as money transmitters under federal law. Earlier concerns from law enforcement groups and several senators focused on whether those protections could create blind spots for anti-money laundering enforcement. Following negotiations, Republican Senators Chuck Grassley and Cynthia Lummis reportedly reached an agreement addressing prosecutors’ ability to pursue financial crimes involving digital assets. Soon after the text was released, the DeFi Education Fund said the latest version still contains the “most important provisions” for developers and infrastructure providers, including protections under the Exchange Act and the BRCA language. Another structural revision introduces a federal transition threshold for state-chartered stablecoin issuers. Under the updated framework, trust companies operating under state oversight may issue stablecoins up to a $10 billion cap before moving into mandatory federal supervision. Reserve standards have also been tightened. The legislation now requires stablecoins to maintain 1:1 backing using cash or highly liquid assets such as short-term US Treasuries, effectively excluding algorithmic stablecoin models from the regulated US market. Ethics fight still unresolved Despite the compromises, one issue continues to threaten bipartisan support. Absent from the latest Senate Banking Committee draft are provisions restricting federal officials from profiting through crypto ventures while shaping related legislation. Democrats have increasingly tied their support for the bill to the inclusion of ethics safeguards connected to public officeholders and digital assets. Earlier this week, a spokesperson for Angela Alsobrooks said negotiations with Republicans were continuing in “good faith,” though the spokesperson added that a compromise on ethics provisions would be necessary to secure Democratic backing for the markup vote. Meanwhile, Kirsten Gillibrand said during Consensus Miami 2026 that Democrats would not support the legislation without conflict-of-interest language. At the same event, White House crypto adviser Patrick Witt said the administration supports ethics rules that apply uniformly across government positions rather than targeting a specific officeholder. Criticism from Senate Democrats intensified after the bill text became public. In a statement released Monday night, Senate Banking Committee ranking member Elizabeth Warren argued the legislation could “turbocharge Donald Trump’s crypto corruption” because it lacks restrictions preventing federal officials from benefiting financially from crypto businesses. Bloomberg previously estimated that President Donald Trump and affiliated ventures generated at least $1.4 billion from crypto-related activities, including memecoins and ties to the DeFi project World Liberty Financial. Earlier proposals introduced in the Senate Agriculture Committee sought to limit certain crypto transactions involving lawmakers and senior federal officials, though those provisions were ultimately left out of the committee-approved version earlier this year. Before the legislation can reach the Senate floor, lawmakers must still reconcile the Banking Committee draft with a separate version already advanced by the Senate Agriculture Committee. Senate passage would likely require at least 60 votes, forcing Republicans to secure meaningful Democratic support at a time when ethics concerns and banking-sector opposition continue to divide negotiators. The post What’s new in the Senate Banking Committee’s updated CLARITY Act? appeared first on Invezz
