The US Senate Banking Committee will consider planned changes to the Digital Asset Market Openness Act (Clarity Act) this week. Dozens of different proposals will be brought to the agenda at the session, but it is estimated that most changes will not be accepted. First of all, the current version of the bill has created serious debate among MPs regarding public ethics, legal protection for software developers, and protection demands specific to the decentralized finance (DeFi) sector.
Tough debates in the US Senate
The amendment list is mainly signed by Democratic Senators Elizabeth Warren and Jack Reed. However, Republican members, who hold the majority in the committee, are not keen on large-scale changes to the law. Each amendment in the commission will be discussed separately and accepted or rejected after a vote, unless withdrawn. Finally, the Committee will vote on the entire bill and move it to the next stage.
Representative Jack Reed, a Democrat from Rhode Island, has proposals that meet demands from the banking industry to further limit stablecoin returns. Reed also advocates completely removing the Blockchain Regulatory Certainty Act, which exempts developers without direct access to money from regulation.
In this context, Nevada Senator Catherine Cortez-Masto also proposed a safe harbor regulation that would exempt software developers from criminal liability if they fail to comply with money transfer laws. Maryland Senator Chris Van Hollen, meanwhile, is introducing eight separate amendments that would ban the President and senior public officials from owning, promoting or affiliated with digital asset companies.
Conflict of interest and ethical discussions
One of the most striking proposals brought forward by Elizabeth Warren aims to limit political corruption and presidential bank ownership by targeting the bank applications of the president and companies close to him. Warren also calls for the removal of a significant portion of the digital commodity inspection sections in the current bill. Another change suggestion of the senator is to impose a ceiling on credit card interest rates and make bank audit documents public.
Virginia Senator Mark Warner has a say in the illegal financing discussions for the DeFi ecosystem. Warner proposed a control mechanism to determine when decentralized trading protocols would be subject to anti-money laundering regulations under the Bank Secrecy Act.
CBDC and next steps
Republican Senator Bill Hagerty has introduced a bill calling for a ban on digital central bank currencies (CBDCs) to be issued by the US Federal Reserve. Legislative proposals for CBDCs have previously been brought to the agenda in the other chamber of Congress.
It is reported that this week’s session was planned in advance by the Republicans in a controlled manner to determine which changes would be enacted into law. Although it is known that hundreds of amendment proposals were made in the past and the session was postponed due to discussions, some problems were resolved with the negotiations held in recent months. Following committee approval, the bill could be combined with a similar regulation passed by the Senate Agriculture Committee.
However, in order for the bill to finally pass in the Senate, Democrats’ demands regarding conflict of interest and ethics rules will have to be taken into account. In particular, no consensus has yet been reached on the article regulating the relations of the president and his inner circle with crypto companies. Some members, including Democratic Senator Kirsten Gillibrand, declared that the bill would not pass the Senate if this requirement was not met.
Clarity Act supporters are aware that at least 60 votes are needed to pass the bill in the Senate. The bill will then be voted on again in the US House of Representatives. Parliament had already approved a similar bill last year.
Coinbase CEO Brian Armstrong, in his post on X on Wednesday, emphasized that the law will “provide faster, cheaper and easier access for the American people to the financial system.”
