Kirsten Gillibrand

Democratic Senator Kristen Gillibrand has highlighted the ethics provision as a key provision that the Senate needs to include in the CLARITY Act for it to gain bipartisan support. She also mentioned two other issues that she believes they need to resolve before a markup for the crypto bill occurs.

Ethics Provision Key To CLARITY Act’s Passage

Speaking at the Consensus Miami conference, the senator asserted that the crypto bill will pass if it includes an ethics provision. The ethics provision has become a key issue threatening the crypto bill ahead of a potential markup.

Democratic senators continue to push for this provision to curb Trump’s crypto businesses. The provision could prohibit senior elected officials and their families from being actively involved in crypto. Senator Adam Schiff, who is leading the negotiations for Senate Democrats, had said earlier that they were making progress toward including the provision in the CLARITY Act.

It is worth noting that the ethics provision falls outside of the Senate Banking Committee’s jurisdiction. As such, the Committee could still mark up the crypto bill without including this provision. However, Democrats on the Committee have signaled they are unlikely to vote to advance the crypto bill without a deal on including this provision.

Besides the ethics provision issue, the CLARITY Act is still facing the stablecoin language hurdle, as banks have pushed back on the stablecoin yield compromise. They argue that the current text doesn’t do enough to prevent deposit flight risk. However, Senator Thom Tillis and Angela Alsobrooks, who brokered the deal, have signaled that it is final despite pushback from these banks.

Two Other Key Issues Ahead Of A Markup

Senator Gillibrand also mentioned consumer protections and safeguards against illicit finance and terrorism financing as two other key issues they need to resolve ahead of a potential markup, which could occur this month. Law enforcement groups and the crypto industry are currently clashing over the DeFi provision that relates to illicit finance.

These law enforcement groups argue that the DeFi provision in the CLARITY Act, which protects crypto software developers, makes it harder to crack down on illicit finance. Senator Cynthia Lummis revealed that negotiations are ongoing and that a deal could be reached soon.