The Senate Banking Committee has posted a fresh full draft of the CLARITY Act, giving lawmakers a more detailed negotiating text for one of Washington’s most important crypto market-structure fights. The update is the first major full-text revision since January and arrives after Senate Banking Democrats entered the CLARITY Act markup without a unified position.
The updated CLARITY Act draft keeps the bill’s main goal intact: drawing clearer federal lines for digital assets, crypto intermediaries, SEC oversight, CFTC authority, and assets that may trade outside traditional securities rules once a network reaches certain conditions. The new version does not settle the political fight, but it gives both parties a fuller text to amend, defend, or challenge.
Several of the most important changes sit in Title I. The draft rewrites key definitions, adjusts SEC-related authorities, and adds new language around network tokens, ancillary assets, and systems under “coordinated control.” That phrase replaces earlier “common control” wording and may become central to how lawmakers separate genuinely distributed networks from projects still directed by insiders, affiliated entities, or coordinated groups.
A new Section 109 adds insider-trading language. It keeps core anti-fraud securities provisions in place for offers, sales, and distributions involving ancillary assets, including transactions under Regulation Crypto. At the same time, the draft says that language should not automatically turn secondary-market transactions in non-security ancillary assets into securities transactions. That split is one of the bill’s central compromises: stronger abuse protections without treating every token trade as a securities trade by default.
DeFi And Stablecoin Incentives Get Sharper Treatment
The DeFi section has also been rewritten in a way that could shape how protocols, front ends, and intermediaries are classified. Section 301 defines a decentralized finance trading protocol as a system where users execute transactions through predetermined, non-discretionary automated rules without relying on another person to custody or control their assets.
The same section creates a separate category for non-decentralized finance trading protocols when a person, coordinated group, or controlling structure can materially change operations, functionality, or consensus rules. It also looks at whether a system runs through transparent source code and whether any party can restrict, censor, or block user activity. In practice, the language tries to stop platforms from claiming DeFi status when meaningful control still sits with identifiable operators.
Stablecoin incentives remain another sensitive piece of the bill. Section 404 restricts covered digital asset service providers from paying interest or yield to U.S. customers solely for holding payment stablecoins, while preserving room for bona fide activity-based or transaction-based rewards. The provision keeps stablecoin yield at the center of the debate after bank lobbying turned payment-token rewards into one of the CLARITY Act’s sharpest fights.
Developer protections remain largely intact. Section 604 keeps the core Blockchain Regulatory Certainty Act language, which protects non-controlling developers and software providers from being treated as money transmitters, financial institutions, or digital asset service providers solely because they create or publish software for distributed ledger services. The protection depends on the developer not having unilateral control over user transactions.
The draft also reworks bankruptcy and insolvency language in Sections 701 and 702, narrows part of the SEC tokenization authority limitation in Section 505, and adds a new Section 904 called the Build Now Act. The committee’s section-by-section outline also places the bill’s SEC-CFTC coordination language, custody framework, and state-federal oversight provisions into a cleaner structure for negotiation.
The bill is still only draft legislation, but the updated text gives the Senate a clearer battlefield. The next fight is no longer just whether Congress wants crypto market-structure rules. It is whether lawmakers can agree on the exact line between software and financial intermediation, stablecoin rewards and deposit-like yield, token distributions and securities offerings, and decentralized systems and platforms still controlled from behind the curtain.
