Sen. Cynthia Lummis (R-WY) requested that Democratic colleagues support the Clarity Act on Thursday, September 10, ahead of a scheduled procedural vote on the Senate floor next week. The bill, which proposes a regulatory framework for cryptocurrency, has undergone revisions during negotiations. Lummis, who chairs the Senate Banking subcommittee on digital assets, stated that Republicans have agreed to 114 specific changes requested by Democrats to make the legislation bipartisan.
The proposed legislation is based on the Responsible Financial Innovation Act, originally introduced in 2022 by Lummis and Sen. Kirsten Gillibrand (D-NY). Over 11 months of negotiations, the bill grew from under 300 pages to more than 600 pages. According to a document from Lummis’s office, the changes include 33 edits in the first title, 23 new sections on illicit finance, and 30 revisions to the portion of the bill overseen by the Commodity Futures Trading Commission (CFTC).
Despite these revisions, some lawmakers continue to express reservations. Democrats have raised ethics concerns regarding the ability of elected officials to profit from the industry. While a July agreement would bar public officials and their spouses from issuing digital assets, Democrats have argued that state attorneys general, rather than the Department of Justice, should handle enforcement. Additionally, Republican Senators Mike Rounds (S.D.) and Jerry Moran (Kan.) have expressed concerns that stablecoin provisions do not sufficiently protect the lending capabilities of traditional banks.
The Clarity Act would establish a federal regulatory framework for the U.S. digital asset industry, affecting approximately 4 million Americans who lost access to funds during previous exchange collapses like Celsius and Voyager. Under the current status quo, these individuals often wait years in bankruptcy proceedings to recover portions of their deposits. The bill aims to change this by creating specific custody rules and bankruptcy protections that would treat customer deposits as protected assets rather than general bankruptcy pool assets.
For the broader economy and the digital asset industry, the legislation seeks to provide the regulatory certainty required for firms to remain in the United States. Lummis stated that without these rules, investment, jobs, and tax revenue could shift to other jurisdictions such as Singapore or the United Arab Emirates. Law enforcement agencies would also receive new tools to monitor and prevent illicit finance, closing gaps that Lummis said are currently being utilized by foreign adversaries to move money.
If the Senate does not act on the bill, Lummis estimated that the next opportunity for similar market structure legislation might not occur until 2030 at the earliest. The immediate next step is a procedural vote scheduled for Tuesday, September 15. The outcome of that vote will determine if the bill can proceed toward final passage.