Crypto Bill heads toward key senate vote in September: What Trump-backed Clarity Act proposes
The US Senate is moving closer to establishing a comprehensive federal regulatory framework for cryptocurrencies, with Republican lawmakers advancing the Clarity Act ahead of a
The US Senate is moving closer to establishing a comprehensive federal regulatory framework for cryptocurrencies, with Republican lawmakers advancing the Clarity Act ahead of a crucial vote after the August recess. If passed, the legislation would mark a major victory for President Donald Trump and the cryptocurrency industry, while reshaping how digital assets are regulated by federal agencies. Senate Majority Leader John Thune has moved to set up a procedural vote when lawmakers return in mid-September. Republicans will need at least 60 votes, meaning they must win support from at least eight Democrats if all voting Republicans back the bill. Here is what the Clarity Act would do. What is the Clarity Act? The Clarity Act is designed to establish a federal rulebook for the cryptocurrency industry. One of its central goals is to determine which digital assets should be treated as securities and which should be classified as commodities, while establishing the regulatory responsibilities of agencies such as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC). Crypto companies have long argued that regulatory uncertainty has discouraged investment and innovation in the US. Supporters say the bill could provide greater legal certainty and encourage wider adoption of digital assets. 1. Ethics rules for Trump and other politicians One of the most politically sensitive provisions concerns cryptocurrency ventures involving senior government officials. The bill would prohibit certain political figures — including the president, vice president and some members of Congress — from issuing or sponsoring a digital asset until January 2029. The provision is particularly significant for Trump because his family has profited from cryptocurrency ventures. Democrats have made stronger ethics safeguards a condition for supporting the legislation. However, the proposed enforcement mechanism is contentious. The bill would give the Justice Department responsibility for enforcing the ban.
Some Democrats have argued that state attorneys general should be able to pursue enforcement if the Justice Department fails to act. The legislation explicitly prevents state attorneys general from bringing enforcement cases under this provision. 2. New rules for stablecoin rewards The bill also tackles one of the biggest points of contention between crypto companies and banks: rewards on stablecoins. Stablecoins are cryptocurrencies designed to maintain a stable value, generally by being backed by assets such as US dollars. Under the proposed legislation, crypto companies would not be allowed to offer rewards on idle stablecoin balances that resemble traditional bank deposits. However, rewards linked to actual transactions, such as payments made using stablecoins, would be permitted. The SEC, CFTC and Treasury Department would jointly develop rules governing the provision. Why are banks concerned? Banks argue that allowing crypto companies to offer rewards could encourage customers to move deposits away from traditional financial institutions and into stablecoins. Crypto companies, meanwhile, argue that a broad ban on rewards would limit competition and prevent exchanges and other platforms from developing new products. 3. Tougher anti-money-laundering rules The Clarity Act would bring digital commodity exchanges, brokers and dealers largely under the same anti-money-laundering framework that applies to financial institutions. Crypto companies covered by the provision would have to comply with requirements under the Bank Secrecy Act, including Customer identification Due diligence Anti-money-laundering controls Suspicious activity monitoring The provision would represent a significant compliance requirement for parts of the crypto industry that have argued they should not necessarily be subject to the same rules as traditional banks. 4. Crypto companies get a fundraising exemption The bill would also provide a new fundraising pathway for crypto companies. Eligible companies could raise up to $50 million annually and $200 million in total without registering the fundraising with the SEC in the same way traditional companies do.
The BriefWire