Trump endorses revised Clarity Act, boosting hopes for crypto regulations as Senate Republicans seek bipartisan support ahead of key vote.
Summary
- Senate Republicans have introduced a revised Clarity Act, their "final offer," ahead of a critical vote requiring 60 votes, including at least seven from Democrats.
- Trump supports stricter ethics regulations, including divestment or blind trusts for covered officials, and changes to the Blockchain Regulatory Certainty Act.
- Industry response is cautiously optimistic, with projections of a 25% chance of passage by 2026, despite tight legislative timelines.
The crypto industry is witnessing renewed optimism as Senate Republicans unveil a revised version of the Clarity Act, aimed at garnering bipartisan support before a key vote scheduled for Tuesday. To move forward, the bill needs 60 votes, requiring at least seven Democrats to join the Republicans.
This latest proposal is being described as the Republicans' "last, best and final offer," and includes a newly endorsed ethics framework by former President Donald Trump. The revisions address critical issues that have hindered negotiations, specifically the Blockchain Regulatory Certainty Act and stablecoin regulations.
Senate Democrats held discussions on the proposal on Sunday, but have yet to publicly respond. Republicans assert that the bill now includes over 120 amendments that cater to Democratic requests. Senator Cynthia Lummis (R-WY), a leading proponent of the bill, emphasized that opposing it would mean rejecting substantial ethical reforms and risking U.S. leadership in digital assets.
Key Updates in the Clarity Act
Notably, Trump's endorsement covers about 80% of an earlier ethics proposal, which was a significant concern for Democrats regarding his business interests in cryptocurrency. The revised provisions empower state attorneys general to enforce restrictions on officials connected to digital assets, a shift from previous White House resistance. Additionally, it broadens the definition of “covered officials” to include elected officials and their spouses, who must either divest their interests or place them in a blind trust.
Trump's change in stance on ethics regulations is notable, especially given his previous objections to what he viewed as targeting. Last year, he reported over $1.4 billion in income from crypto ventures, raising concerns about conflicts of interest within the industry.
Discussions with advisors may have influenced Trump's decision, as crypto leaders argued that accepting certain ethical standards could bolster his legal defenses in the face of potential investigations. There could also be financial advantages for Trump in agreeing to divest, potentially delaying tax liabilities on sold assets.
DeFi Regulations in the Clarity Act
The Blockchain Regulatory Certainty Act has also undergone significant changes; it clarifies that software developers who do not manage customer funds will not need to register as money transmitters. However, protections against criminal prosecution have been removed, which some industry advocates view as a drawback.
Despite some concessions to the banking sector, the bill maintains previous agreements regarding stablecoin rewards and introduces a "circuit breaker" mechanism to allow Treasury intervention if significant deposit migration occurs from banks to stablecoins.
Additionally, the revised text modifies the “Ag title,” clarifying that state consumer protection laws apply and addressing concerns related to derivatives and gaming regulations.
The outcome of Tuesday's vote remains uncertain, especially given the tight legislative timeline. However, initial reactions from the crypto sector are positive, with some analysts raising the likelihood of the bill passing in 2026 from 10% to 25%, though they caution that the legislative process still poses significant challenges.
