New CLARITY Act Bans Presidents From Issuing Crypto Tokens

While lawmakers moved toward stricter rules for public officials, the revised draft preserves protections for software developers. The Blockchain Regulatory Certainty Act framework generally shields developers and infrastructure providers from being classified as money transmitters solely because they write software or maintain decentralized networks, provided they do not control users' assets.

The protection has become an important issue for DeFi developers. The draft maintains a limit on that protection for people who knowingly facilitate illegal transactions, preserving a route for prosecutors to pursue criminal conduct.

Republicans have paired those protections with a new package aimed at answering law-enforcement concerns about crypto crime. The draft would provide additional resources for state and local investigations involving digital assets and expand access to blockchain-analysis tools. It would also establish training programs for investigators and prosecutors and create a cyber-focused center to address threats connected to foreign actors, including North Korea and Iran.

A public-private task force would coordinate government and industry responses to cryptocurrency fraud. Stablecoin issuers would face requirements to comply with valid government orders involving actions such as freezing or seizing assets.

Stablecoin rewards and bankruptcy protections

Another dispute that threatened CLARITY earlier this year remains largely settled in the new draft. The stablecoin section keeps the compromise negotiated by Republican Senator Thom Tillis of North Carolina and Democratic Senator Angela Alsobrooks of Maryland.

Companies would be barred from paying interest merely because customers leave payment stablecoins sitting in an account. Rewards connected to qualifying activity, including transactions and certain other uses of the tokens, could continue as long as they do not function like interest paid on a traditional bank deposit.

The distinction emerged after banks warned that allowing stablecoin providers to offer deposit-like yields could pull money away from insured bank accounts, while crypto companies argued that a broad prohibition could eliminate loyalty programs.

The updated legislation also retains bankruptcy protections intended to clarify what happens to customers' digital assets when an exchange or custodian fails. Customer assets covered by the protections would remain customer property rather than automatically becoming part of the bankrupt company's estate. The distinction became a major issue after failures including Celsius and FTX.

Timeline and outlook

The revised text now moves the CLARITY Act into another round of negotiations. The Senate is scheduled to begin its August state work period on Aug. 10, leaving less than three weeks for negotiators to settle outstanding issues, complete the necessary procedural steps and secure floor time.

No Senate vote on CLARITY had been scheduled as of press time. Even if the bill clears the Senate, it would still face another legislative hurdle before reaching the White House. The Senate has substantially revised the version passed by the House, meaning both chambers would need to reconcile their differences and approve identical language before the legislation could be sent to President Trump.