This week’s US Senate Banking Committee hearing to consider changes to the Digital Asset Market Clarity Act has dozens of changes to weigh, though it’s likely that almost all of them won’t survive the process of Thursday’s event.
Lawmakers have pushed a number of proposed changes to the market structure bill as it approaches the hearing known as a “markup,” from amendments that would establish government ethics rules to others that set safe harbors for developers to one that would cut a must-have protection for the decentralized finance (DeFi) sector, plus a number of other minor, technical tweaks.
The list is notably dominated by the names of a few lawmakers, including Democratic senators Elizabeth Warren and Jack Reed. Their topics are expected to be a rhetorical wish list as other members of the committee — mostly Republicans — seek to advance the bill without significant overhauls.
Each amendment will be discussed during the hearing and will ultimately receive a vote unless withdrawn. A simple majority is required to adopt or reject an amendment. Finally, the Banking Committee will vote to advance the bill itself.
Here are some highlights, according to a list of the proposals circulated ahead of the hearing:
- Senator Reed, a Rhode Island Democrat, wants to adopt some of the requests from banking lobbyists to further limit stablecoin dividends, according to one of his 18 amendments.
- He would also completely scrap the section known as the Blockchain Regulatory Certainty Act, which protects software developers who don’t control people’s money from being regulated as money transmitters.
- On the same topic, Senator Catherine Cortez-Masto, a Nevada Democrat, wants to “protect software developers by creating a safe harbor from criminal liability for failing to register as a money transmitter at the state or federal level.”
- Senator Chris Van Hollen, a Maryland Democrat, is proposing eight amendments, including one that would usher in a major Democratic request: banning the president and other high-ranking officials from “owning, promoting or affiliated with” digital asset companies.
- More specifically, Senator Warren would “prohibit political corruption in banking applications and presidential bank ownership,” and it appears to directly target efforts by World Liberty Financial — a company linked to President Donald Trump and his family — to obtain a U.S. bank charter.
- Warren, who is also seeking to eliminate entire parts of the current digital commodity oversight bill, went further with some changes, seeking to cap credit card interest rates and calling for bank oversight involving “Jeffrey Epstein and his co-conspirators.” (The bill itself contains some non-crypto provisions, including housing-targeting legislation championed by Sen. John Kennedy, a Republican from Louisiana.)
- Senator Mark Warner, a Virginia Democrat who has been at the center of illegal finance deals involving DeFi, is proposing “a control test to determine when individuals operating non-decentralized financial trading protocols are subject to” Bank Secrecy Act anti-money laundering obligations.
- On the Republican side of the committee, Senator Bill Hagerty of Tennessee is seeking a ban on central bank digital currencies (CBDCs) issued by the US Federal Reserve. CBDC bans have already been pushed in various other bills by lawmakers, most recently in the House of Representatives bill to reauthorize the Foreign Intelligence Surveillance Act.
Thursday’s session to consider advancing the Clarity Act is likely already well planned for what the Republican majority will allow into the legislation. The last time the Clarity Act was headed for a mark-up in the same committee, it reached this stage, with around 75 amendments offered, although that hearing was adjourned shortly afterwards.
Earlier wrinkles in the negotiations have since been ironed out over four months of negotiations, paving the way for committee approval this week. Once that happens, this bill could be merged with the parallel effort that has already cleared the Senate Agriculture Committee.
However, some significant changes are still expected after this week, including efforts to address Democrats’ demands for a conflict-of-interest provision to cut ties between government officials and the crypto sector, particularly seen with the president and his family. A meeting earlier this week on the ethics provision reportedly remained contentious, and Democrats including Sen. Kirsten Gillibrand have said the Clarity Act will not pass in the Senate without it.
Clarity’s advocates need to secure a number of Democratic supporters for the bill if it is to clear the 60-vote hurdle that is standard in the Senate. Then the bill needs another approval from the US House, which had already passed a similar bill last year.
In a Wednesday post on social media X, Coinbase CEO Brian Armstrong called the bill “strong” and said it “will benefit the American people by making the American financial system faster, cheaper and more accessible.”
“Feel it,” he said.
Read more: Clarity Act, in the flesh, unveiled by US Senate Banking Committee ahead of hearing
