Senate Republicans release latest crypto bill language

• Key insight: The ethics agreement reached between Senate Republicans and the White House falls short of where Democrats have said they need it to be for the bill to earn their support. 
• Forward look: Observers expect more negotiating to go on behind the scenes over the next couple of weeks, but time is running short to pass a bill before the August recess. 
• What's at stake: Banks didn't get anything in this newer version as the stablecoin yield provision remains unchanged from what previously passed the Senate Banking Committee. 

WASHINGTON — Senate Republicans have released the newest and near-final version of the CLARITY Act. 

This version includes an ethics agreement between Senate Republicans and the White House, a provision that Democrats have said is a must-have to earn their support. But that language falls short of what Senate Democrats — particularly Sen. Ruben Gallego, D-Ariz., and Angela Alsobrooks, D-Md. — have said they require.

The provision would ban all elected officials, including the president, from issuing digital assets. But the bill leaves enforcement of that ban in the hands of the Department of Justice, a loophole that Democrats are unlikely to accept, as the president could simply dismiss the attorney general if the agency investigates him. 

The ethics provision would sunset Jan. 20, 2029. 

By contrast, Democratic negotiators had wanted to hand enforcement power of that ethics provision to state attorneys general. Gallego and Alsobrooks and other crypto-friendly Democrats who voted for CLARITY in the Senate Banking Committee said they did so with the understanding that lawmakers would hash out ethics language before the bill reaches the floor. Those lawmakers will now have to decide if they want to support the legislation nonetheless. The bill will require 60 votes to pass, necessitating considerable bipartisan buy-in.

The new CLARITY language also includes the same language around stablecoin yield that lawmakers voted on in the Senate Banking Committee. The banking industry wanted to insert some additional rules around how and when stablecoin companies could offer yield-like products, like subscriptions.

At the markup, lawmakers didn't vote on the banking industry's proposed changes, blocked by Senate Banking Committee Chairman Tim Scott, R-S.C. 

The industry still hoped to add "circuit breaker" language that would have automatically halted interest payments on stablecoins if the activity triggers massive deposit flight from traditional banks. 

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