Senate panel gets 100+ Clarity Act amendments on stablecoins

More than 100 amendments to the Clarity Act were filed by senators and committee staff in Washington ahead of the Senate Banking Committee’s planned markup. The proposals cover stablecoin backing and supervision, rules for decentralized finance, agency jurisdiction and new ethics and disclosure requirements.

The amendments range from technical drafting fixes to substantial policy rewrites. Several would tighten reserve and audit requirements for stablecoin issuers, require issuers to obtain bank or trust charters, and expand Federal Reserve supervisory authority. Other proposals would restrict algorithmic stablecoins and add clearer anti-money-laundering and know-your-customer obligations for crypto firms.

Some amendments would assign explicit enforcement authority to agencies such as the Securities and Exchange Commission or the Commodity Futures Trading Commission. A number of filings seek carve-outs for certain DeFi protocols, while others would subject automated smart contracts to compliance duties and reporting obligations.

Ethics-related proposals would require more detailed disclosures from advisory-board members and industry representatives, establish cooling-off periods for former regulators who take private-sector roles, and mandate public reporting of meetings between committee staff and lobbyists.

Committee members and outside stakeholders filed the amendments to shape negotiations before the markup. Pro-industry changes generally propose narrower rules and safe harbors for crypto startups and decentralized protocols. Amendments from consumer advocates and some lawmakers call for stronger consumer protections, higher capital requirements and tougher criminal penalties for fraud.

Committee procedure will determine which amendments are debated and offered for votes during the markup. If the panel approves the bill, it would move to the full Senate for further consideration. Passage in the Senate would not ensure final law; differences with House proposals and further regulatory work would still need resolution.

Lawmakers pursued a federal framework after market failures and fraud in 2022, including exchange collapses and problems with collateral that eroded confidence in some digital assets. Supporters of federal legislation have argued for uniform national standards to prevent a patchwork of state rules and to protect the payments system. Critics have warned that prescriptive rules could push activity offshore.

Industry groups, consumer advocates and financial regulators provided comment letters and testimony in earlier hearings. Some amendments echo positions from banks and established financial firms that favor integrating stablecoins into existing banking structures, while others reflect priorities of crypto-native firms seeking lighter regulation for decentralized protocols.

Observers in and outside government are watching the markup for decisions about regulatory jurisdiction, the balance between safety and market flexibility, and the standards that will apply to technology increasingly used in payments and financial services.