This week’s U.S. Senate Banking Committee hearing to consider amendments to the Digital Asset Market Clarity Act has dozens of amendments to weigh, though nearly all of them likely won’t survive the process of Thursday’s event.
Lawmakers have pushed a number of proposed changes to the market structure bill as a hearing known as “margin” approaches, from amendments that would establish government ethics rules to others that would establish safe harbors for developers, to one that would remove a must-have protection for the decentralized finance (DeFi) sector, plus a host of other smaller technical tweaks.
The list is particularly dominated by the names of some lawmakers, including Democratic Sens. Elizabeth Warren and Jack Reed. His points are expected to be a rhetorical wish list as other committee members, mostly Republicans, seek to advance the bill without significant reforms.
Each amendment will be discussed during the hearing and will eventually receive a vote, unless they are withdrawn. A simple majority will be required to adopt or reject an amendment. Eventually, the Banking Committee will vote to advance the bill.
Below are some highlights, based on a list of proposals that circulated before the hearing:
- Senator Reed, Democrat of Rhode Island, wants to adopt some of the banking lobbyists’ requests to further restrict stablecoin yields, according to one of his 18 amendments.
- It would also completely eliminate 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 topic, Sen. Catherine Cortez-Masto, D-Nev., wants to “protect software developers by creating a safe harbor from criminal liability for failing to register as money transmitters at the state or federal level.”
- Sen. Chris Van Hollen, D-Md., is pushing eight amendments, including one that would institute a major Democratic request: prohibiting the president and other top government officials from “owning, promoting or affiliated with” digital asset companies.
- Senator Warren would “more specifically prohibit political corruption in banking applications and in the ownership of presidential banks,” apparently taking direct aim at the effort by World Liberty Financial – a company linked to President Donald Trump and his family – to obtain a US banking charter.
- Warren, who is also seeking to eliminate entire sectors of the current bill related to oversight of digital products, went further with some amendments, seeking to cap credit card interest rates and calling for bank oversight records involving “Jeffrey Epstein and his co-conspirators.” (The bill itself includes some non-cryptocurrency provisions, including legislation targeting housing championed by Sen. John Kennedy, a Louisiana Republican.)
- Sen. Mark Warner, a Virginia Democrat who has been at the center of negotiations over illicit finance involving DeFi, proposes “a screening test to determine when persons who operate 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 seeks a ban on central bank digital currencies (CBDCs) issued by the US Federal Reserve. Lawmakers have already pushed for CBDC bans in several other bills, most recently in the House bill to reauthorize the Foreign Intelligence Surveillance Act.
Thursday’s session to consider moving forward with the Clarity Act is likely already well planned for what the Republican majority will allow to be included in the legislation. The last time the Clarity Act was on its last approach to a margin in this same committee, it reached this stage where some 75 amendments were offered, although that hearing was postponed shortly after.
Previous wrinkles in the negotiation have since been ironed out during four months of talks, clearing the way for committee approval this week. Once that happens, this bill can be merged with the parallel effort already passed by the Senate Agriculture Committee.
However, some significant changes are still expected after this week, including the effort to resolve Democrats’ demand for a conflict of interest provision to sever ties between government officials and the crypto sector, especially seen with the president and his family. A meeting earlier this week on that ethics provision reportedly remained contentious, and Democrats, including Sen. Kirsten Gillibrand, have said the Clarity Act will not pass the Senate without it.
Clarity advocates need to get a number of Democratic supporters for the bill if they want to clear the 60-vote hurdle that is standard in the Senate. The bill then needs to get another approval from the US House of Representatives, which had already passed a similar bill last year.
In a Wednesday post on the social media site
“Mark it,” he said.
Read more: The Clarity Act, in person, presented by the US Senate Banking Committee before the hearing
