Senate Republicans have released a revised version of the Clarity Act, a 630-page crypto market structure bill, introducing new regulatory requirements for decentralized finance (DeFi) protocols. The updated text, released ahead of a crucial procedural vote scheduled for September 15, mandates that non-decentralized DeFi protocols register with the Commodity Futures Trading Commission (CFTC).
The bill targets individuals or groups that can materially control decentralized trading protocols, requiring them to register with the CFTC. Additionally, the CFTC and the Treasury will jointly develop rules governing these activities. The legislation narrows certain DeFi provisions to spot and cash digital commodity transactions, addressing concerns around blockchain-based prediction markets.
Another significant clarification involves credit unions: the act now explicitly affirms their authority to engage in cryptocurrency transactions, signaling broader acceptance of digital assets by traditional financial institutions. The ethics section of the bill remains unchanged.
Despite these updates, the legislation still faces hurdles. Democrats have not yet signaled support for the latest version, raising questions about whether Republicans can secure enough votes to pass the bill. The path to President Donald Trump's desk remains uncertain.
The CFTC's involvement underscores a shift toward more formalized oversight of DeFi. Market participants are closely watching how enforcement will unfold, as compliance requirements could influence institutional interest and trading strategies, particularly in prediction markets and compliant DeFi projects.
