RUU CLARITY Act Enters Critical Phase, DeFi and Stablecoins Become the Spotlight

Source: TokocryptoBlog Original Title: RUU CLARITY Act Enters Critical Phase, DeFi and Stablecoin Take Center Stage Original Link: The discussion of the US (RUU) crypto bill, the CLARITY Act, has entered a crucial phase after senators proposed 137 amendments ahead of the markup process in the Senate Banking Committee. Issues surrounding stablecoin (yield) returns and DeFi regulation have become the main points of contention that could determine the future direction of crypto regulation.

The 278-page draft of the CLARITY Act was released on Monday night local time, after five months of bipartisan discussions. Most industry players in crypto only saw the full document on Tuesday. The deadline for submitting amendments, which falls at 17:00 on the same day, triggered a surge in proposed changes from various senators.

Stablecoin Yield Becomes the Most Debated Issue

One of the most heated debates concerns the provision of yield on stablecoins. Senators Angela Alsobrooks and Thom Tillis proposed bipartisan amendments to clarify which activities allow users to earn returns. The goal is to clearly define the boundary between permitted yield models and structures that are considered to violate regulations.

This issue is deemed crucial because it directly affects the business models of stablecoin issuers and could have significant impacts on the broader crypto market.

DeFi Under Scrutiny After Industry Pressure

In addition to stablecoins, decentralized finance (DeFi) also comes under the spotlight. Senators Pete Ricketts and Cynthia Lummis proposed revisions to DeFi regulation language following industry rejection of new clauses perceived to create legal uncertainty for decentralized protocols.

This move aims to allay fears that new regulations could treat DeFi protocols as centralized entities.

Ethics of Officials and Warren Amendments

Senator Chris Van Hollen proposed measures to prevent government officials from profiting from crypto businesses, including anti-touting rules requiring disclosure of financial interests for those promoting crypto assets.

However, some of these ethics amendments are not expected to be decided immediately during the markup stage, given the limited authority of the Senate Banking Committee. The issue is likely to be discussed in later stages in the Senate.

Meanwhile, Senator Elizabeth Warren heightened tensions by submitting more than 20 amendments, including proposals to ban stablecoin yields entirely and efforts to revoke the pro-crypto guidance issued by the Office of the Comptroller of the Currency (OCC) last year.

Markup as the Key to Regulatory Direction

Some amendments even go beyond crypto substance. For example, Senator Jack Reed proposed amendments supporting Federal Reserve Chair Jerome Powell amid the Department of Justice investigation, indicating that the markup process is also used for broader political messaging.

Patrick Witt, Executive Director of the White House Crypto Council, stated that ethical provisions will be added after the bill passes the committee and before the full Senate vote, signaling potential further changes.

On the other hand, Senate Agriculture Committee Chair John Boozman announced rescheduling the markup to target January 27, with the latest draft of the bill expected to be released a week earlier.

With hundreds of amendments submitted, the outcome of the CLARITY Act markup is predicted to be a decisive factor in how significantly it will impact the industry and the global crypto markets.