Crypto Industry Seeks Clarity as U.S. Legislators Propose CLARITY Act Amendment

U.S. legislators have proposed an amendment to the Digital Asset Market Clarity Act of 2025, also known as the CLARITY Act. This amendment aims to incorporate protections for blockchain developers and service providers, ensuring they are not classified as money transmitters under the potential market structure law. The amendment seeks to clarify the regulatory landscape for digital assets, providing a clearer framework for the industry.

The proposed amendment comes at a time when the crypto industry has been actively lobbying for favorable regulatory conditions. The industry had spent millions in the 2024 elections to influence the regulatory regime, with the GENIUS Act being a key piece of legislation. The GENIUS Act, which would sanction stablecoins and enable Big Tech firms to issue their own private currencies, was seen as a significant step in restructuring the financial system to suit the industry's ends. However, the process has faced several hurdles, including concerns from the banking industry and internal political dynamics.

The banking industry, particularly community banking associations, has expressed opposition to the GENIUS Act. They argue that the bill could create a "shadow" sector of stablecoin-issuing non-banks with access to Federal Reserve services, without the same regulatory scrutiny that banks endure. This opposition has added to the complexity of passing the legislation.

Additionally, the Senate Majority Leader's commitment to "regular order" has allowed senators to propose amendments, leading to delays. Senator Michael Bennet offered a clarifying amendment that restrictions on "senior executive branch officials" in the bill would include the president and vice president. However, it is Senator Roger Marshall's Credit Card Competition Act (CCCA) that has stalled the entire process. The CCCA, co-sponsored by Senator Dick Durbin, aims to inject competition into the credit card processing market by forcing banks to offer alternatives to Visa and Mastercard. This amendment has been met with resistance from the banking sector and credit card companies, who see it as a potential threat to their business model.

The delay in passing the GENIUS Act has broader implications for the crypto industry. The market structure bill, which aims to strip the Securities and Exchange Commission of most oversight and transfer it to the Commodity Futures Trading Commission, is also at risk. The continued anger at Democrats collaborating with Republicans on crypto, amidst Trump's use of crypto for self-enrichment, has further complicated the legislative process. Democrats on the House Financial Services Committee have held their own hearing, assailing Trump's crypto offerings and pointing out faults in the market structure bill. This has led to a delay in the House's work on the Digital Asset Market Clarity Act, as Democrats seek more time to address their concerns.

The proposed amendment to the CLARITY Act reflects the ongoing efforts to balance the interests of the crypto industry with those of traditional financial institutions. The amendment seeks to provide clarity and protection for blockchain developers, while also addressing the concerns of the banking industry. However, the political dynamics and internal disagreements within the Senate and House have created significant hurdles for the passage of these bills. The outcome of these legislative efforts will have a profound impact on the future of digital asset regulation in the U.S.