Democrats in the U.S. Senate have sent their own counterproposal to the Republican negotiators just hours before the crucial procedural vote on the CLARITY Act on Sep. 15. At the same time, 1
Democrats in the U.S. Senate have sent their own counterproposal to the Republican negotiators just hours before the crucial procedural vote on the CLARITY Act on Sep. 15.
At the same time, 18 attorneys general and eight banking associations are demanding further changes to the version Republicans have described as their final offer.
Related: Treasury Secretary Bessent issues stern warning ahead of Sep. 15 Senate vote
Journalist Jasper Goodman reported that the Democratic counterproposal has now been delivered to Republican negotiators, as per three people familiar with the matter. It is not yet known what specific changes Democrats are seeking.
On Monday evening, Democratic senators met in the office of Minority Leader Chuck Schumer for discussions. Republicans had previously described the text released the day before as their "final" offer.
One of the main sticking points remains the new ethics rules. Democratic Senator Adam Schiff told journalist Eleanor Mueller that the provisions “don't go far enough.”
The provisions, in their current form, likely would not apply to the first family and would functionally cover mainly federal employees while excluding the president,” he said.
There are also "just too many carveouts,” he added.
As reported earlier, the coalition of attorneys general opposing the bill is being led by New York Attorney General Letitia James. Together with 17 of her counterparts, she warned that the bill could weaken states’ authority to prosecute crypto fraud and protect investors.
The attorneys general are particularly concerned about potentially expanded powers for the U.S. Securities and Exchange Commission (SEC), which could allow it to override state-level registration requirements.
Congress, they argue, must ensure that states retain their existing authority to investigate, enforce rules and maintain registration requirements for digital assets.
The intervention is politically significant ahead of the vote because the coalition is bipartisan. Opposition to the current text therefore cannot be attributed solely to Democrats.
At the same time, eight banking associations have sent a joint letter to Senate Majority Leader John Thune and Democratic Leader Chuck Schumer on Sep. 14. In their view, even the latest version of the CLARITY Act does not go far enough to prevent potential outflows of bank deposits into yield-bearing stablecoin products.
Related: Bitcoin analyst spots 2015 signal that preceded 9,800% rally
The new draft includes a so-called “Circuit Breaker.” The provision is designed to give the U.S. Treasury Secretary additional authority to restrict stablecoin rewards if substantial deposit outflows from community banks actually occur. For the banks, however, the mechanism would kick in too late:
“A safeguard that is only activated after substantial deposits have already flowed out is no safeguard at all.”
The associations are therefore calling for stricter language to close loopholes that could still allow providers to make interest-like payments on stablecoin holdings.
