CLARITY Act draft adds housing pilot, omits ethics before markup

Senate Banking Committee staff on Monday released a draft of the Digital Asset Market CLARITY Act that adds a Build Now Act housing pilot in its final pages and contains no explicit ethics provisions ahead of a scheduled Thursday markup.

Senators Tim Scott, Cynthia Lummis and Thom Tillis posted the text the committee will use for consideration. The draft builds on earlier versions from July and September and reflects months of negotiations between crypto industry and banking representatives over stablecoin rules and yield on crypto products. The bill would move significant digital-asset oversight to the Commodity Futures Trading Commission from the Securities and Exchange Commission.

The housing provision, described in the bill’s section-by-section summary as the Build Now Act, would create a pilot program to incentivize housing development in certain jurisdictions that participate in the Community Development Block Grant program. The provision appears at the end of the CLARITY draft and is not directly tied to digital-asset market structure language.

Some Senate Democrats have raised objections to the lack of ethics language in the draft. Senator Kirsten Gillibrand has said she would not support market-structure provisions on the Senate floor without clear ethics rules to address potential conflicts of interest. Angela Alsobrooks, a Banking Committee member who helped negotiate a stablecoin yield compromise, expressed hope for a bipartisan markup and said, “My hope is to get to a bipartisan markup on Thursday with a compromise on ethics.”

Senator Elizabeth Warren criticized the draft in a statement, writing that it “includes zero provisions” to prevent conflicts tied to the president’s crypto activities and asserting that the president’s family has realized significant gains from crypto deals. Warren added that the bill “puts investors, our national security and our entire financial system at risk.”

On technical policy, the draft would bar paying interest or yield on payment stablecoins while carving out “rewards or incentives based on bona fide activities or bona fide transactions that are not economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.” The text also incorporates language from the Blockchain Regulatory Certainty Act to protect software developers from classification as money transmitters. The DeFi Education Fund said it was encouraged by recent negotiations and cited the developer protections.

A version of CLARITY advanced by the Senate Agriculture Committee in January gave the CFTC more authority over digital assets and passed along party lines. For the Senate to send a final bill to the president, the Banking Committee must advance the measure, the full Senate must approve it, and any differences with House legislation must be reconciled. A separate stablecoin payments bill, the GENIUS Act, passed the Senate in June by a 68-30 bipartisan vote. Thursday’s markup will consider the current draft and the concerns raised about the housing pilot and the absence of ethics provisions.