Senate Republicans Release Final CLARITY Act Proposal With Historic Ethics Restrictions

Republicans Present Revised CLARITY Act as Final Offer

Senate Republicans unveiled a substantially revised version of the CLARITY Act on Sunday, positioning it as their ultimate negotiating stance with Democrats on digital asset regulation. The comprehensive proposal spans 635 pages and was released by Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis, alongside Senate Banking Committee Chairmen John Boozman and Tim Scott. The timing proves critical, arriving just two days before a procedural vote scheduled for Tuesday at 2:15pm Eastern Time that will determine whether the legislation advances to floor consideration.

Unprecedented Ethics Provisions Backed by Trump

A central feature of the revised proposal establishes ethics restrictions that exceed typical legislative safeguards. President Trump voluntarily agreed to these unprecedented restrictions, which would apply to every federally elected official, judge, and their spouses. The revised rules would empower state attorneys general to enforce prohibitions preventing federal officials from issuing, sponsoring, or holding significant financial interests in digital assets. Additionally, exchanges listing assets in violation of these rules would themselves face enforcement. Covered individuals must either divest significant financial interests in digital assets or place them in a qualified blind trust arrangement. Violations would incur civil penalties of either $500,000 or 20% of the transaction amount involved, whichever is higher. The ethics provisions would take effect 360 days after the bill’s enactment, or sooner if implementing regulations are finalized earlier.

Lummis emphasized that the new proposal reflected extensive bipartisan work, stating that a year of intense daily negotiations had preceded this version. The current proposal incorporates 126 specific changes based on Democratic requests. A Republican aide characterized this as the party’s final offer on the bill.

Developer Protections and Stablecoin Framework

Beyond ethics provisions, the revised proposal modifies stablecoin regulation and extends developer safeguards. The Treasury Secretary would gain authority to issue rules restricting stablecoin rewards if community banks experience substantial deposit losses, though this authority would sunset 18 months after enactment. Notably, revised Blockchain Regulatory Certainty Act provisions extend existing protections against treating individuals as money transmitters or financial institutions to miners and validators—groups previously excluded from such safeguards. The proposal removes references to Section 1960 of Title 18 of the US Code, which addresses unlicensed money transmitting. Additional changes strengthen regulatory oversight of affiliate trading and conflicts of interest at digital commodity exchanges, brokers, and dealers, while clarifying how consumer protection laws apply to the sector.

Market participants have begun pricing in passage likelihood. Polymarket odds for the CLARITY Act passing this year reached 35% on Monday, the highest probability assigned to the bill since late July, suggesting growing confidence among traders that the legislative path may be narrowing toward resolution.

Regulatory clarity on digital assets has become increasingly critical as institutional participation in cryptocurrency markets accelerates and policymakers seek frameworks that protect consumers while enabling innovation.

Source: US Senate Republicans, via Cointelegraph. Not financial advice.