Negotiations between Republicans and Democrats in the US Senate have stalled ahead of a critical vote on the CLARITY Act, which includes comprehensive regulations for the cryptocurrency market. With Republicans in the Senate rejecting the Democrats’ latest counter-proposal, it remains unclear whether the bill can secure the 60 votes needed to move forward.
The procedural vote on the Clarity Act is scheduled for Tuesday at 9:15 PM Turkish time. For the bill to proceed to the formal debate phase in the Senate, at least 60 senators must vote to limit debate and move the vote forward. Reaching this stage comes after more than a year of deliberations in the Senate and over five years of Congress’s efforts to pass comprehensive market structure legislation for the cryptocurrency market.
Senate Republicans argued in an updated bill released Sunday evening that they had made significant concessions on ethics rules, legal protections for software developers, and provisions falling under the jurisdiction of agricultural committees. The new text also includes a “circuit breaker” mechanism aimed at addressing concerns that stablecoin yields could accelerate deposit outflows, particularly from small and local banks.
Republicans, noting that the final draft incorporates a total of 126 comprehensive changes requested by the Democrats, describe the current text as their “final, best, and ultimate proposal.”
However, Democrats did not find the changes sufficient. According to sources close to the matter, Democratic senators presented a new counter-proposal to Republicans on Monday. While the proposal did not request any further changes to the provisions regarding stablecoin yields, it is stated that this issue is largely under Republican control in the negotiations.
Democrats are reportedly calling for additional restrictions on public officials who own large amounts of cryptocurrency under ethical guidelines, stricter rules regarding crypto assets held by dependents, and paid cryptocurrency promotions.
Democrats also want the scope of protections provided to software developers under the Blockchain Regulatory Certainty Act (BRCA) to be further narrowed, and for it to be explicitly stated that the regulation does not alter existing criminal law. Under the agriculture section, they are requesting stricter rules regarding conflicts of interest with cryptocurrency exchanges, as well as the addition of provisions to protect tribal governments’ regulations on gaming and gambling.
With Republicans rejecting the Democrats’ latest counter-offer, all eyes are now on today’s crucial vote.
*This is not investment advice.