Senate Democrats have sent Republicans a CLARITY Act counteroffer hours before the Sept. 15 procedural vote, keeping negotiations open over ethics and other contested provisions.
Politico congressional reporter Jasper Goodman reported late Monday that Democrats had delivered the counterproposal to Republican negotiators, citing three people familiar with the talks. The full Democratic proposal had not been publicly released as of early Tuesday, leaving its precise requested changes unconfirmed.
Before the counteroffer was delivered, Sen. Mark Warner said Democrats who had participated in the negotiations were preparing another proposal. Ethics restrictions involving federal officials remained one of the issues under discussion after Republicans released their latest bill text.
The Democratic proposal followed a revised Republican CLARITY Act draft released ahead of Tuesday’s floor test. Reuters reported that Republican negotiators said the new text incorporates 126 substantive changes requested by Democrats during months of talks.
The latest version contains revised restrictions on government officials’ crypto interests, changes affecting stablecoin rewards and protections involving blockchain software developers. Republican negotiators have presented the text as their attempt to resolve enough outstanding disputes to secure the 60 votes needed for cloture.
As crypto.news previously reported in its review of the Republican proposal, President Donald Trump agreed to revised ethics language covering the president, vice president, members of Congress, federal judges and certain family members. The proposal sets conditions governing covered officials’ financial interests in digital assets.
The latest Republican language gives state attorneys general authority to bring certain civil enforcement actions involving the ethics rules. Reuters reported that some Democratic senators remained unconvinced that the revisions went far enough, particularly over restrictions involving public officials’ crypto businesses.
One part of the ethics proposal would require covered officials to address certain digital-asset financial interests through mechanisms that can include divestment or qualified blind trusts. The exact application of those provisions remains part of the negotiations before senators vote on whether to begin consideration of the bill.
Republican negotiators have argued that the latest text already incorporates extensive Democratic input. Sen. Cynthia Lummis, Senate Banking Committee Chairman Tim Scott and Senate Agriculture Committee Chairman John Boozman have led negotiations on the Republican side.
According to Reuters, Republicans describe the proposal as containing 126 substantive Democratic-requested changes. The additions cover several areas that had delayed agreement, including ethics provisions and financial-stability concerns surrounding stablecoins.
White House digital-assets adviser Patrick Witt said during a Washington event Monday that the administration believed Republicans had gone far in addressing objections to the legislation. Speaking about the possibility of more revisions, Witt said remaining changes were approaching the level of “punctuation.”
Republicans have described the current ethics package as drawing heavily from negotiations involving Republican Sen. Thom Tillis and Democratic Sen. Ruben Gallego. The provisions seek to establish restrictions for senior government officials while creating mechanisms for enforcement.
Stablecoin rewards remain another source of disagreement. The revised legislation contains a regulatory mechanism allowing the Treasury secretary to determine whether stablecoin reward practices cause harmful deposit losses at community banks.
Under the proposal described by banking groups, Treasury would have 18 months after enactment to determine whether the existing framework produced a “substantial detrimental impact” on community banks with less than $10 billion in assets. If Treasury makes such a finding, banking regulators would be directed to adopt restrictions. The American Bankers Association criticized the mechanism, arguing that the response could come after deposits have already moved.
Banking organizations have continued pressing senators to change the bill before the procedural vote. Nearly 80 state bankers associations joined the American Bankers Association and Independent Community Bankers of America in requesting stronger language on stablecoin interest and rewards.
In a Sept. 10 letter described by the ABA, the groups proposed specific changes designed to prevent digital-asset service providers from offering interest-like incentives that they say could pull deposits away from community banks.
The groups argue that bank deposits support mortgages, small-business financing and agricultural credit. Their concerns focus on stablecoin payment incentives and are separate from Democrats’ negotiations over government ethics provisions.
Crypto.news previously reported on the opposition from banks and state attorneys general as lawmakers prepared for the Senate vote. The disputes cover separate sections of the legislation, including stablecoin rewards and state enforcement authority.
State regulators have raised their own concerns. New York Attorney General Letitia James led a bipartisan coalition of 17 other attorneys general asking Congress to preserve state enforcement and registration powers over digital assets.
The coalition said provisions in the CLARITY Act could weaken states’ ability to pursue cryptocurrency fraud, securities violations and other investor-protection cases. The attorneys general asked Congress to preserve state authority over tokenized and non-tokenized securities, state registration systems and cooperation between federal and state regulators.
Their concerns are distinct from the revised ethics provisions that would grant state attorneys general authority to enforce certain restrictions against federal officials.
Meanwhile, the banking sector’s resistance predates the final negotiating push. Banking and crypto groups had intensified lobbying during the Senate recess, with banks concentrating heavily on the risk that stablecoin rewards could draw deposits away from traditional lenders.
The Senate’s official schedule lists the CLARITY Act cloture vote for approximately 2:15 p.m. ET on Tuesday, Sept. 15.
Senators are scheduled to vote on invoking cloture on the motion to proceed to Calendar No. 423, H.R. 3633, the Digital Asset Market Clarity Act. The chamber will return from its weekly caucus meetings shortly before the vote.
Sixty votes are required to invoke cloture. Republicans hold 53 Senate seats, so Democratic or independent support is required even if every Republican senator backs the motion.
The scheduled vote does not constitute final passage of the CLARITY Act. A successful cloture vote would allow the Senate to move toward formal consideration of the legislation, where lawmakers could debate the text and offer amendments.
As crypto.news explained in its Sept. 15 vote guide, ethics restrictions, stablecoin rewards and rules affecting decentralized finance remained among the areas attracting scrutiny before the procedural vote.
Republican sponsors have indicated that their latest market-structure language could be offered as a substitute amendment once the Senate proceeds to the bill. Senators could then consider further amendments before voting on final passage.
Any Senate version that differs from the legislation approved by the House would require further House action before a final measure could be sent to the president.
The official Senate schedule still lists the cloture motion at approximately 2:15 p.m. ET, with additional votes possible later during Tuesday’s session.
