This week’s U.S. Senate Banking Committee hearing to consider changes to the Digital Asset Market Clarity Act has dozens of amendments up for consideration, although it’s likely that almost all of them will not survive the process for Thursday’s event.
Lawmakers have floated a series of proposed changes to the Market Structure Bill in the run-up to the hearing, known as “mark-ups,” ranging from amendments that would establish government ethics rules, to others setting safe harbors for developers, to amendments that would remove much-needed protection for the decentralized finance (DeFi) industry, as well as a number of other smaller technical tweaks.
The list is particularly dominated by a few names of legislators, including Democratic senators Elizabeth Warren and Jack Reed. Their points are expected to constitute a rhetorical wish list as other committee members — mostly Republicans — seek to advance the bill without significant overhauls.
Each amendment will be discussed at the hearing and potentially voted on, unless withdrawn. A simple majority will be required to adopt or reject an amendment. Ultimately, the Banking Committee will vote to advance the bill itself.
Here are some highlights, according to a list of proposals released before the hearing:
- Sen. Reed, a Rhode Island Democrat, wants to adopt some of bank lobbyists’ demands to further restrict stablecoin yields, according to one of his 18 amendments.
- It would also entirely remove 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 subject, Senator Catherine Cortez-Masto, Democrat of Nevada, wants to “protect software developers by creating a safe harbor from criminal liability for failure to register as a money transmitter at the state or federal level.”
- Sen. Chris Van Hollen, a Maryland Democrat, is proposing eight amendments, including one that would establish a major Democratic demand: prohibiting the president and other high-ranking government officials from “owning, promoting, or affiliating” with digital asset businesses.
- Senator Warren would specifically ban “political corruption in banking applications and ownership of presidential banks,” appearing to directly target efforts by World Liberty Financial – a company linked to President Donald Trump and his family – to obtain a U.S. banking charter.
- Warren, who is also seeking to remove swaths of the current bill regarding surveillance of digital products, went further with a few amendments, attempting to cap credit card interest rates and calling for bank surveillance cases involving “Jeffrey Epstein and his co-conspirators.” (The bill itself includes some non-crypto provisions, including targeted housing legislation championed by Sen. John Kennedy, a Louisiana Republican.)
- Sen. Mark Warner, a Virginia Democrat who has been at the center of illicit finance negotiations involving DeFi, is proposing “a gatekeeping test to determine when persons operating non-decentralized financial trading protocols are subject to the anti-money laundering obligations of the Bank Secrecy Act.”
- On the Republican side of the committee, Senator Bill Hagerty of Tennessee is seeking to ban 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 review progress on the Clarity Act is likely already well planned for what the Republican majority will allow in the legislation. The last time the Clarity Act was in its final approach to a markup in this same committee, it got to this point where some 75 amendments were proposed, although that hearing was postponed shortly afterward.
Previous negotiating difficulties have since been ironed out during four months of negotiations, paving the way for committee approval this week. Once that is done, this bill can be merged with the parallel effort already approved by the Senate Agriculture Committee.
However, some significant changes are still expected after this week, including efforts to address Democrats’ demand for a conflict of interest provision regarding cutting ties between government officials and the crypto industry, including with the president and his family. A meeting earlier this week on that ethics provision reportedly remained controversial, and Democrats including Sen. Kirsten Gillibrand said the Clarity Act would not pass the Senate without it.
Clarity supporters need to get a certain number of Democratic supporters for the bill if it is to clear the 60-vote hurdle that is the standard in the Senate. Next, the bill must gain further approval from the U.S. House of Representatives, which already passed a similar bill last year.
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Read more: The Clarity Act, in the flesh, revealed by the US Senate Banking Committee before the hearing
