Clarity Act Heads Toward Partisan Senate Showdown

Amendments Rejected, Partisan Lines Harden

Senator Tim Scott is expected to reject more than a dozen amendments to the Digital Asset Market Clarity Act over drafting issues ahead of the Senate Banking Committee markup on Thursday, according to Politico. The move points toward a largely partisan vote on legislation that would create a comprehensive federal regulatory framework for the crypto industry for the first time.

More than 100 amendments were filed by lawmakers ahead of the hearing, covering changes to sanctions authorities, central bank digital currency bans, and stablecoin reward language, among other adjustments. Virtually all of them are not expected to be incorporated into the Clarity Act, making the sheer volume largely procedural. Still, the filings underscore the depth of disagreement between the two parties.

Members of the Senate Banking Committee filed over 130 proposed amendments ahead of Thursday's markup, with 44 coming from Senator Elizabeth Warren (D-Mass.) alone. Democrats are expected to zero in on ethical concerns related to President Trump's crypto entanglements, with growing concerns among Democrats that if ethics provisions are not included in the bill at the Banking Committee stage, they will not be included at all.

What the Bill Would Do and What Comes Next

Under the draft, the SEC would oversee most initial token sales and offerings treated as digital asset securities. The CFTC would regulate spot trading of digital commodities, which covers tokens that reach a sufficiently decentralised state. Payment stablecoins would sit under a mix of Federal Reserve and state supervision.

In Thursday's markup, Chairman Scott is expected to highlight protecting Main Street and national security while keeping crypto innovation in the U.S. as the bill's major goals. Assuming the bill gets a nod from the panel, it would still need to be merged with a similar version approved by the Senate Agriculture Committee, and lawmakers would need to resolve the conflict-of-interest provision before a final version is ready for a full Senate vote, where 60 yes votes will be needed.

The ethics question has been contentious given President Trump's wide-ranging crypto interests, while Democrats have said they will not allow the bill to move without such a provision.

Sources:
Fortune: The Clarity Act hits a critical juncture ahead of Senate markup
CoinDesk: Clarity Act amendments would remake key parts of crypto bill but have doubtful future
CoinDesk: Clarity Act unveiled by Senate Banking Committee before hearing