Author: Danny Park

Translation:深潮 TechFlow

Summary of 深潮:The Republican Party in the U.S. Senate released the "final draft" of the CLARITY Act before a crucial procedural vote, incorporating 126 substantive amendments demanded by the Democrats, including the ethical restrictions on public officials related to cryptocurrency that Trump has largely accepted, as well as a "circuit breaker" mechanism for stablecoin rewards.

However, this concession does not mean the bill is secure: the procedural vote on September 15 requires 60 votes, while the Republicans have only 53 seats, which means they still need to garner support from at least 7 Democratic or independent senators even if all party members support it.

With the midterm elections approaching, the time window for the CLARITY Act in Congress is rapidly closing; after the latest text was released, its probability of passing within the year on Polymarket has increased from about 22% to 32%.

Key Points Overview

• The Republican Party in the U.S. Senate has released a new version of the CLARITY Act, incorporating several amendments demanded by Democrats, including provisions regarding ethical standards.
• U.S. President Donald Trump has agreed to the ethical restrictions in the bill, which will limit government officials and their spouses' participation in cryptocurrency-related transactions.

Before the procedural vote scheduled for Tuesday, the Senate Republicans revealed what they termed the "Digital Asset Market Clarity Act" (H.R. 3633) final draft.

Senators Cynthia Lummis, John Boozman, and Tim Scott announced the bill's text late on Sunday and stated that the new draft incorporates 126 "substantive amendments" proposed by the Democrats. If the procedural motion passes on Tuesday, the new text will be submitted as a substitute amendment.

Republicans indicated that the new version absorbs most of the content from the Tillis-Gallego ethical proposal, including granting state attorneys general the authority to enforce public officials' conflict of interest provisions. Previously, some Democrats had made the inclusion of such provisions a condition for supporting the bill.

According to previous reports by the Associated Press, Trump has largely agreed to the proposed ethical provisions of the CLARITY Act. Trump and his family have been under political scrutiny due to their cryptocurrency businesses, including World Liberty Financial, USD1 stablecoin, and TRUMP Meme coin. Trump's financial disclosure documents reveal that he generated over $1.4 billion in cryptocurrency-related income in 2025. Meanwhile, his administration is drafting regulatory rules for the cryptocurrency industry, raising questions about conflicts of interest.

Lummis stated in a press release: "President Trump voluntarily accepted unprecedented ethical restrictions, subjecting all federally elected officials, judges, and their spouses to the strictest ethical constraints in U.S. history. The Democrats have gotten what they wanted, and now they should accept this answer."

The bill text indicates that the ethical provisions will apply to public officials or government employees, the elected president, the elected vice president, the elected members of Congress, and the spouses of those individuals. However, the bill does not specify restrictions on other family members, such as officials' children.

Stablecoin "Circuit Breaker" Mechanism

The draft also grants the U.S. Secretary of the Treasury a power: if a payment-type stablecoin triggers massive withdrawals, the Secretary of the Treasury can implement a "circuit breaker" on the stablecoin reward mechanism to limit deposit outflows from community banks. This power will be effective for 18 months after the bill takes effect.

In a dispute that has not yet been resolved between the banking and cryptocurrency sectors, banks have been calling for tighter regulations regarding stablecoin yields.

Currently, the bill restricts platforms from paying interest on idle stablecoins held by users but still allows rewards based on actual usage of stablecoins. This circuit breaker mechanism is clearly designed to provide banks with an "emergency brake" to address concerns about large deposit outflows that could threaten the existence of community banks.

Rob Nichols, president and CEO of the American Bankers Association, stated earlier on Sunday:

"During the August recess, bankers and bank customers directly explained to senators that local deposits are the foundation of community credit across the U.S. We are encouraged to see more senators recognizing the need to address loopholes regarding stablecoin interest in the bill and further strengthen the CLARITY Act."

Other provisions in the new text include: amending the Blockchain Regulatory Certainty Act to narrow the scope of software developers who need to register for money transmission business, and increasing civil liability safe harbors; setting limits on related-party transactions and conflicts of interest within the jurisdiction of the Agriculture Committee; and clarifying under what circumstances and how state consumer protection laws apply.

Time is Running Out for CLARITY

Patrick Witt, executive director of the White House Digital Asset Advisor Committee, wrote on X:

"After more than a year of negotiations, it is time to pass this bipartisan bill."

For the CLARITY Act to pass in a timely manner, the time window is extremely narrow.

The first test will come on September 15, Tuesday, the day after the Senate reconvenes. A procedural vote will take place, requiring support from 60 senators.

Currently, the Republican Party holds 53 seats, so even if all Republican senators vote in favor, they still need at least 7 Democratic or independent senators to join the support camp.

Even if this procedural motion passes, it only allows the Senate to formally enter the review stage for the bill. Amendments still need to be processed, final votes conducted, and the House must also address the substitute text proposed by the Senate. All these procedures must be completed within the limited session remaining before the midterm election campaign season arrives.

The Senate's tentative schedule for 2026 shows that members will enter a state work period starting October 5, while the midterm election day is November 3. The House leadership has also canceled sessions for the weeks of September 21 and September 28, further narrowing the legislative time window.

Lummis stated last week that if the CLARITY Act cannot pass in this Congress, its legislative process may be delayed until 2030, resulting in a loss of several years of jobs, investment, and tax revenue.

After the latest version of the bill's text was released, the probability of the CLARITY Act passing this year on Polymarket increased from about 22% to 32%.