The Senate Banking Committee unveiled a revised text of the Clarity Act ahead of a key vote

The Senate Banking Committee presented a new draft of the Clarity Act days before a scheduled markup vote, reopening discussions on stablecoin oversight, DeFi protections, and ethics rules tied to the crypto activities of government officials.

According to a statement issued by Tim Scott, the revised 309-page proposal came after extended discussions between lawmakers, crypto companies, banking groups, and policy negotiators working to resolve the disputes that plagued the early January payments. Scott said the legislation would provide “certainty, protections and accountability” while strengthening the country’s position in digital finance.

Committee members are expected to discuss and amend the bill on Thursday. The momentum around the law weakened earlier this year after Coinbase pulled support over the limits tied to stablecoin rewards, forcing negotiators back to the table to rewrite important sections of the proposal.

Under the revised language, firms will still be prohibited from paying performance yields just for holding stablecoins. At the same time, this proposal now allows certain incentives linked to work linked to payments and platform participation, a compromise that several crypto firms had pushed during the negotiations.

The revised draft adds new DeFi and stablecoin provisions

Included in the latest text is language tied to the Blockchain Regulatory Certainty Act, which would specify that developers and infrastructure providers that do not store users’ assets should not be considered money transmitters under federal law.

Law enforcement officials and several senators have previously expressed concern that the provision could create barriers to anti-money laundering enforcement. Earlier this week, Punchbowl News reported that Senators Chuck Grassley and Cynthia Lummis reached an agreement designed to preserve prosecutors’ ability to pursue crypto-related financial crimes.

After the draft was released, the DeFi Education Fund said the law still contains important protections for software developers and infrastructure providers, including BRCA language and protections linked to the Exchange Act.

Several structural changes tied to stablecoin oversight also appeared in the revised proposal. State chartered trust companies will be allowed to issue stablecoins until they reach a limit of $10 billion, after which they will switch to mandatory state supervision.

Maintenance requirements were also tightened. Under the revised framework, regulated stablecoins will need to maintain 1:1 backing using cash or highly liquid assets such as short-term US Treasuries. The language effectively leaves algorithmic stablecoins out of the regulated market structure envisioned under the bill.

Important concerns remain unresolved

One of the biggest sticking points heading into Thursday’s caps remains the absence of conflict of interest laws involving government officials and crypto investments.

Democratic lawmakers have repeatedly argued that ethics protections must be included before legislation can gain bipartisan support. Earlier this week, a spokeswoman for Angela Alsobrooks said talks with Republicans were continuing, though the spokeswoman added that compromises on the ethics provisions would be necessary to support the Democratic Alliance.

During Consensus Miami 2026, Kirsten Gillibrand also said that Democrats will not support this bill without conflict of interest language. Appearing at the same event, White House crypto advisor Patrick Witt said the administration supports ethical standards that are applied consistently across the government rather than laws targeting a single office holder.

After the revised draft became public on Monday night, Senate Banking Committee member Elizabeth Warren criticized the legislation for leaving limits on crypto-related profits tied to government officials.

Bloomberg previously estimated that Donald Trump and associated companies made at least $1.4 billion through crypto-related activities, including memecoins and World Liberty Financial links.

Speaking during a live chat on X earlier this week, Brian Armstrong said the talks did not deliver all the changes requested but added that the revised framework retains the “must-haves” for the industry. Armstrong also said that Coinbase has been working with several of the world’s largest banks as traditional financial institutions continue to explore crypto integration.

Meanwhile, in a letter distributed to bank executives over the weekend, Rob Nichols warned the current framework could encourage deposit migration from traditional banks to stablecoins. The American Bankers Association and other financial groups continued to lobby senators for stricter restrictions on stablecoin reward programs ahead of the hearing.

A study published last week by Galaxy Digital revealed that foreign income tied to the acquisition of stablecoins may solve concerns about the movement of domestic deposits. According to the report, much of the future growth in stablecoin issuance is expected to come from outside of the United States, potentially directing offshore money to the US financial infrastructure.

Even if Thursday’s announcement is successful, Senate negotiators will still need to combine the Banking Committee’s draft with a different version already approved by the Senate Agriculture Committee. Final passage in the Senate may require the support of at least 60 lawmakers, leaving negotiators under pressure to secure Democratic votes while arguments over ethics rules and stablecoin oversight continue.