Key Insights:
- Ethics enforcement remains a major Democratic concern.
- Stablecoin rewards continue facing resistance from banking groups.
- State regulators want stronger authority over digital-asset enforcement.
CLARITY Act negotiations entered a decisive phase Monday after Senate Democrats sent Republicans a counterproposal ahead of Tuesday’s procedural vote. The move keeps negotiations open over ethics rules, stablecoin rewards, and state enforcement powers as lawmakers seek the 60 votes needed to begin Senate consideration.
Democrats send counteroffer before vote
Senate Democrats gave a counterproposal late on Monday according to people who know about the talks. Senate Democrats said that people who know about the talks confirm this. Politico reporter Jasper Goodman first said this mentioning three people who were involved in the talks.
News: Democrats have sent their Clarity Act counterproposal over to GOP negotiators, per 3 people with knowledge of the matter https://t.co/Bf9zNA2dhr
— Jasper Goodman (@Jasper_Goodman) September 15, 2026
The full proposal had not been released to the public by Tuesday. Therefore, the precise changes requested by Democrats remained unclear before senators prepared for the vote.
Democratic negotiators had already met Monday afternoon to discuss unresolved issues. Ethics provisions remained among their central concerns after Republicans released a revised 635-page draft Sunday.
The Republican version included 126 substantive changes that negotiators said Democrats had requested during months of discussions. However, several Democrats still questioned whether the revised ethics language provided sufficient enforcement authority.
One dispute involves state attorneys general and federal officials with crypto interests. Democrats remain concerned that states could not directly sue the president over alleged violations.
The proposal instead gives state attorneys general limited routes through federal courts. Democrats also questioned provisions involving the Office of Government Ethics and its ability to determine whether certain activities remain permissible.
Republicans defend their final draft
Democrats still kept asking for more concessions, said Senator Cynthia Lummis Monday. She said that the GOP negotiators had reached their ceiling.
White House crypto adviser Patrick Witt delivered a similar message during a Washington event. He said Republicans had gone to great lengths to address Democratic objections to the legislation.
Witt described potential remaining changes as close to “punctuation” while acknowledging that senators would make the final decision. Republicans therefore entered the final hours before the vote with little appetite for major revisions.
The latest CLARITY Act draft also addresses stablecoin rewards and protections for blockchain software developers. Its stablecoin provisions remain controversial among banking organizations.
Under the proposal, Treasury could assess whether stablecoin rewards cause substantial deposit losses at community banks. If Treasury finds significant harm, regulators could impose restrictions under the proposed framework.
Banking groups argue that the approach reacts too late. They instead want stronger restrictions that prevent digital-asset firms from offering incentives resembling interest on deposits.
States and Industry Groups Raise Concerns
The negotiations have also exposed disagreements beyond the Senate’s partisan divide. Eighteen attorneys general – including from both parties – have asked the lawmakers to maintain the broader state enforcement powers.
Letitia James, the New York Attorney General, was the head of the coalition. The group cautioned that federal preemption would undermine state powers in the areas of crypto fraud, securities laws violations, investigations, and protection of investors.
The banking industry has raised separate objections. Nearly 80 state banking associations joined broader calls for tighter stablecoin reward restrictions before the Senate vote.
The Indian Gaming Association has also requested changes involving prediction markets. It wants stronger protections for state and tribal gambling laws and limits on sports-related contracts.
Crypto industry groups are still backing the procedural vote. Summer Mersinger, CEO of Blockchain Association, stated that legislation should be bipartisan in order to safeguard consumers and prevent illegal activity.
Senate vote sets legislative test
The Senate was scheduled to vote on the motion around 2:15 p.m. ET on Tuesday. This vote will serve as the test, for the legislative process.
The Republicans have 53 seats and they will need some Democratic and/or independent support. The vote is thus a major litmus test for the degree of support that accrued from months of bipartisan talks.
The outcome of a successful vote would be a non-binding vote. Rather it would enable senators to commence formal consideration, debate the bill and perhaps consider amendments.
The Republican market-structure language could then be offered as a replacement amendment. More talks might take place in the amendment phase. Another obstacle faced by the bill would be if the Senate draft differs from the House-approved bill. The bill would have to be reconciled prior to being sent to President Donald Trump.
Conclusion
The CLARITY Act now faces its most consequential procedural test after Democrats reopened negotiations with a late counteroffer. Despite differences over the ethics, state authority and rewards for stablecoins, Republicans claim their newest draft includes significant Democratic demands.
The Senate vote will help decide if lawmakers will be able to formally debate the legislation. If the senators over that hurdle, however, the remainder of the negotiations could make the difference between the bill being adopted by both parties and not.
