Senate GOP Revises DeFi Rules Ahead of Sept. 15 Vote

TLDR

• Senate Republicans revised the CLARITY Act after negotiations held during the August recess.
• Controlled DeFi protocols may need CFTC registration under the updated Senate language.
• DeFi provisions now focus on spot and cash digital commodity transactions.
• Ethics, BRCA, and stablecoin reward disputes remain unresolved before the Senate vote.
• The September 15 cloture vote requires 60 senators to advance debate on the bill.

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Senate Republicans have released updated CLARITY Act text after negotiations during the August recess. The draft changes DeFi and credit-union provisions, but several disputes that could decide next week’s vote remain unresolved.

For crypto firms, the revisions matter because they clarify which DeFi operators could face CFTC registration. Banks are also watching provisions that could affect stablecoin rewards and digital-asset services.

DeFi Changes Focus on Controlled Protocols

The revised text would require certain DeFi protocols with identifiable control to meet CFTC registration requirements. The language targets protocols that appear decentralized while people or entities still control key functions.

Senator Cynthia Lummis said the update specifies when “decentralized-in-name-only” protocols must register with the CFTC. She also said the text contains more than 100 changes requested by Democrats.

The DeFi provisions now apply only to spot or cash transactions involving digital commodities. Lummis said the narrower scope responds to Native American concerns about blockchain-based prediction markets.

That change separates the DeFi framework from broader event-contract disputes while keeping commodity-market oversight in the bill. It addresses one negotiating point without reopening the entire market-structure framework.

Credit Unions Gain Clarity as Stablecoin Dispute Continues

Republicans also added language clarifying when federal and insured credit unions can engage with digital assets. The provisions cover distributed-ledger technology and crypto activities already permitted under existing powers.

The addition gives credit unions clearer statutory footing as financial institutions expand digital-asset services. Existing supervision would continue through the NCUA and relevant state regulators.

The stablecoin debate remains open because the latest draft leaves its rewards language largely unchanged. Banking groups renewed pressure on September 10 and sought tighter restrictions on yield-like rewards.

The ABA, ICBA, and state banking associations argue that those incentives could pull deposits from community banks. That dispute remains another obstacle before the procedural vote.

Ethics and BRCA Still Shape the Vote Count

The updated draft also appears to leave the ethics section unchanged despite negotiations during the recess. Several Democrats want stronger limits involving elected officials and digital-asset interests.

A bipartisan Tillis-Gallego proposal would impose broader restrictions on officials issuing or sponsoring digital assets. The White House has not publicly accepted that approach.

The Blockchain Regulatory Certainty Act language also remains disputed. It addresses when noncustodial software developers can face money-transmitter liability.

Law enforcement groups have sought narrower protections, while DeFi advocates oppose liability for developers without control of customer assets. That disagreement remains unresolved before the vote.

These unresolved questions matter because the new DeFi language alone does not settle the bill’s broader political divide. Ethics and stablecoin rewards could still determine whether enough senators support moving forward.

September 15 Vote Is the Next Test

The Senate returns September 14, and the CLARITY Act faces its next procedural test the following day. The cloture motion on H.R. 3633 is set to be voted on at 2:15 p.m. ET on September 15.

Cloture requires 60 votes, so Republicans need support beyond their conference. The vote would only open Senate consideration and would not constitute final passage.

If cloture succeeds, senators can continue negotiating ethics, stablecoins, BRCA, and other provisions. If it fails, the bill cannot advance through that procedural route.

The post CLARITY Act Update: Senate GOP Revises DeFi Rules Ahead of Sept. 15 Vote appeared first on Blockonomi.

Source: https://blockonomi.com/clarity-act-update-senate-gop-revises-defi-rules-ahead-of-sept-15-vote/