US Senate revises Clarity Act with new DeFi registration requirement

Republican senators in the US have published an updated version of the Digital Asset Market Clarity Act. The new text is the result of negotiations during the August recess and includes, among other things, a requirement for non-decentralised DeFi protocols to register with the regulator, the CFTC. The ethics provisions and rules around stablecoins and yields remain unchanged.

In brief:

• Senate publishes updated Clarity Act after negotiations during the August recess
• Non-decentralised DeFi protocols will now have to register with the CFTC
• DeFi provisions are limited to transactions in spot digital commodities; credit unions gain more clarity about their crypto powers

Registration requirement for DeFi protocols

One of the most notable changes is the obligation for non-decentralised DeFi protocols to register with the Commodity Futures Trading Commission (CFTC). According to journalist Eleanor Terrett, this provision aligns with Section 10301 of the bill as previously drafted by the Senate Banking Committee.

In addition, the DeFi provisions are limited to so-called spot or cash transactions in digital commodities. That restriction appears intended to accommodate objections from indigenous tribes about blockchain-based prediction markets, Eleanor Terrett reports.

Credit unions and further steps

The updated text also clarifies the authority of credit unions to offer crypto-related activities. Until now, there had been uncertainty in the legislation on that point.

The provisions on ethics, the Blockchain Regulatory Clarity Act section and stablecoin yields are unchanged from the earlier version of the bill. It is still unclear when the Senate will vote on the revised text. The publication of the new version shows that active negotiations are taking place behind the scenes over the final shape of one of the most comprehensive crypto regulatory frameworks the US has proposed to date.