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The revised CLARITY Act adds rules for controlled DeFi protocols and narrows key DeFi provisions to spot and cash digital commodity transactions.
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The changes arrive before a crucial Sept. 15 Senate procedural vote, but the legislation still faces resistance from lawmakers and banks.
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<a href="https://xpertsstudio.com/bitcoin-etf-outflows-hit-282-6m-as-xrp-funds-extend-inflow-streak/” title=”Bitcoin ETF Outflows Hit $282.6M as XRP Funds Extend Inflow Streak”>Bitcoin, Ether and XRP remain under pressure ahead of the vote, although macro conditions rather than the CLARITY draft appear to be driving the immediate price weakness.
A revised 630-page version of the Digital Asset Market CLARITY Act has landed just days before a crucial Senate vote, introducing significant changes covering decentralized finance, prediction markets and digital-asset regulation.
Senate Banking Digital Assets Subcommittee Chair Cynthia Lummis released the updated text on Sept. 10 ahead of the Senate’s Sept. 15 procedural vote.
Lummis said the latest version incorporates more than 114 provisions requested by Democratic lawmakers.
Regulatory Oversight for Non-Decentralized vs. Truly Decentralized Protocols
One of the biggest changes targets protocols that claim to be decentralized but remain under identifiable control. Such non-decentralized trading protocols could be required to register with the Commodity Futures Trading Commission and comply with Bank Secrecy Act requirements.
The draft nevertheless contains significant protections for genuinely decentralized infrastructure. Its text says people should not become subject to digital commodity spot-market regulation solely for activities including providing interfaces to access data, administering decentralized governance systems, participating in smart contract liquidity pools, or providing self-custody wallet software. Anti-fraud and anti-manipulation powers remain intact.
Prediction Markets Get a Narrower Carve-Out
Another important revision specifies that the bill’s DeFi provisions apply only to spot and cash digital commodity transactions. Lummis said the change was designed to address tribal concerns over how the legislation could affect prediction markets.
That distinction could become important for platforms operating event-contract and prediction markets because it reduces the risk that broad DeFi language inadvertently rewrites rules governing those products.
The political battle is far from settled. Reuters reported that the crypto industry and banking groups have mounted competing lobbying campaigns ahead of the vote. Democrats have raised concerns about anti-money-laundering and ethics safeguards, while some Republicans and community banks remain worried that crypto products will compete with traditional deposits.
Source: finance.yahoo.com