Senate releases final CLARITY Act with Treasury stablecoin brake

Senators Cynthia Lummis, John Boozman and Tim Scott on Sept. 14 released the final 635-page draft of the Digital Asset Market Clarity Act. The draft adds a Treasury Department circuit-breaker that would allow the Treasury Secretary to restrict rewards tied to payment stablecoins if insured deposits drain from community banks.

Under the draft, the Treasury Secretary would be required to issue rules limiting payment-stablecoin rewards when community banks are experiencing deposit losses on a “substantial” scale. The authority would expire 18 months after the bill becomes law. The provision is framed as a time-limited tool aimed at addressing deposit outflows tied to stablecoin reward programs.

Sponsors describe the text as the result of more than a year of negotiations and say it incorporates 126 substantive changes requested by Senate Democrats. The draft also updates ethics language, includes provisions that shield certain developers from money-transmission registration and creates civil safe harbors for some activities.

Senators plan to offer the draft on the Senate floor as an Amendment in the Nature of a Substitute if a cloture motion succeeds. A procedural cloture vote is scheduled for Tuesday at 2:15 p.m. ET. Republicans hold 53 Senate seats, so supporters would need about seven additional Democratic or independent votes to reach the 60-vote threshold if GOP senators vote as a bloc. If cloture is invoked, the substitute amendment would set the terms for subsequent debate and a final up-or-down vote.

The bill focuses on market-structure issues, including the regulatory split between the SEC and CFTC and trading-market rules, rather than creating a federal issuer charter for stablecoins. The Treasury circuit-breaker sits alongside separate proposals that would set federal rules for payment-stablecoin issuers.

The sponsors named several financial firms as supporters in their release, including BlackRock, Fidelity, Franklin Templeton, Goldman Sachs, Charles Schwab and SoFi. The House version of CLARITY passed 294-134 in July 2025, and the Senate Banking Committee reported the Senate portion out in May 2026 by a 15-9 vote.

Market participants and banking groups are expected to focus on two technical points as the measure moves to the floor: how the draft defines “substantial” deposit flight and how quickly Treasury could move from a finding of deposit losses to formal rulemaking. The 18-month expiration of the authority is a material factor for issuers and platforms that have planned ongoing rewards programs.

The draft bundles market-structure clarifications, revised ethics provisions, developer protections from money-transmission requirements and the temporary Treasury authority to act if deposit competition reaches the draft’s threshold. Sponsors present the package as a negotiated compromise intended to provide regulatory clarity while offering a targeted response to deposit outflows linked to payment stablecoins.