Senate CLARITY Act Draft Seeks Stablecoin, DeFi Compromise

The U.S. Senate is reportedly inching closer to passing its long-delayed cryptocurrency legislation.

As Reuters reported, Senate Majority Leader John Thune, R-S.D., moved Saturday (Aug. 8) to set up a procedural vote on the CLARITY Act when lawmakers come back from their recess in mid-September. The procedural vote could potentially set the stage for a full floor vote.

The Reuters report characterizes the move as a sign that Senate Republicans think they will be able to put together the 60 votes they need to pass the CLARITY Act, even amid opposition from several Democrats. As it stands now, the legislation needs at least eight Democrats and all of the Senate’s Republicans to pass.

As the report noted, the CLARITY Act would provide the crypto industry with its first comprehensive rulebook, establishing when digital tokens are securities or commodities and whether they would be regulated by the Securities and Exchange Commission (SEC) or Commodity Futures Trading Commission (CFTC).

The crypto industry says the act will do what its name suggests: offer the sector legal clarity, while potentially increasing the adoption of cryptocurrencies, the Reuters report added.

But even with the procedural vote scheduled for next month, some observers say the delay could bring down the chances of the CLARITY Act passing before the midterm elections.

“I do think the odds drop precipitously,” Sen. Thom Tillis, R-N.C., told Politico. “We leave for a month, we come back, we’ve got an election ahead of us. I think it gets difficult to get done.”

“Death by 1,000 cuts is just as fatal as a bullet,” the pro-crypto Sen. Cynthia Lummis, R-Wyo., wrote in an X post cited by the Financial Times.

Meanwhile, PYMNTS wrote last week about the latest draft of the bill, which marks another step toward establishing how banks, payment companies, exchanges and other intermediaries would function under a comprehensive federal crypto framework while upholding significant authority for federal banking regulators.

“One of the most closely watched revisions concerns stablecoin rewards programs,” the report said. “The proposal attempts to strike a compromise between banks, which have argued that yield-bearing stablecoins resemble bank deposits, and crypto firms that rely on rewards programs to encourage network participation.”

The draft would generally prohibit digital asset service providers from paying interest or yield merely for holding payment stablecoins. But activity-based rewards related to payments, remittances, liquidity provision, staking, loyalty programs or other transactional activity would be permitted “if they are not economically equivalent to bank deposit interest,” the report added.