Revised CLARITY Act Draft Narrows DeFi Scope Ahead of Senate Vote

Key points

• Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis released the updated CLARITY Act text on September 10, incorporating over 114 provisions requested by Democrats.
• The draft requires non-decentralized trading protocols to register with the Commodity Futures Trading Commission (CFTC) and comply with the Bank Secrecy Act, while protecting genuinely decentralized infrastructure from spot-market regulation.
• DeFi provisions are now limited to spot and cash digital commodity transactions, a change designed to address tribal concerns regarding the impact on prediction markets.
• The bill currently lacks support from any Senate Democrats, though a procedural vote is scheduled for September 15, with a full floor vote potentially following after the summer recess.
• Coinbase CEO Brian Armstrong stated that regulatory clarity will emerge regardless of the bill's outcome, citing potential rulemaking by the SEC and CFTC.

Background

The CLARITY Act, introduced in May 2025, passed the House in July 2026. Previous attempts to advance the bill in August faced procedural hurdles, including a failed cloture filing by Senate Majority Leader Thune. XRP had surged 52% in late August on hopes of regulatory clarity, but recent price weakness in Bitcoin, Ether, and XRP is attributed primarily to macroeconomic factors rather than the legislative draft.

How outlets are covering it

Coinbase CEO Brian Armstrong views the bill as 'ready to get a yes vote' and believes regulatory clarity will occur even if the bill fails, citing SEC and CFTC rulemaking. In contrast, POLITICO Pro notes the draft lacks Democratic support, which is necessary for advancement. Democrats have raised concerns about anti-money-laundering and ethics safeguards, while some Republicans and community banks worry about crypto products competing with traditional deposits. Reuters reported that crypto industry and banking groups are conducting competing lobbying campaigns ahead of the vote.

Why it matters

The outcome of the September 15 vote could determine whether the CLARITY Act becomes a regulatory framework for U.S. crypto markets or if oversight remains fragmented. The narrowed DeFi provisions may reduce risks for prediction market platforms, while the registration requirements for non-decentralized protocols could impact how crypto firms operate. Institutional capital and products like tokenized equities may be unlocked if the bill passes, according to Armstrong.

What to watch

The Senate is scheduled to hold a procedural vote on the CLARITY Act on September 15. If the bill advances, it may face a full floor vote after the summer recess. Negotiations on ethics provisions and anti-money-laundering safeguards are ongoing, with Armstrong describing them as 'very close to a solution.'