Clarity act up for vote tomorrow: Will it change how you use crypto? 5 Key provisions to watch

Ahead of the scheduled committee vote for the Clarity Act - a landmark bill aimed at creating a regulatory framework for cryptocurrencies- on Thursday, the US. The Senate Banking Committee late Monday released the text of the legislation. The bill aims to clearly define the jurisdiction of financial regulators over the fast-growing crypto sector, potentially boosting the adoption of digital assets. Here are five key provisions to look at:

What does the bill say about stablecoin rewards?

The bill seeks to define how crypto exchanges and other crypto players may pay rewards in stablecoins – digital tokens linked to the US dollar. It also tries to resolve a growing clash between crypto firms and banks over the use and regulation of stablecoins.

The bill bans rewards on idle stablecoin balances that closely resemble bank deposits, but permits rewards for other activities associated with stablecoins, such as sending a payment. The provision would require the Securities and Exchange Commission, the Commodity Futures Trading Commission, and the Treasury Department to jointly frame rules for its implementation.

The crypto lobby had originally hoped to pass rewards to customers for keeping stablecoin in an account. Banks have pushed back on this provision, saying it could shift deposits away from the regulated banking system.

Will crypto firms face the same anti-money-laundering rules as banks?

The bill says that crypto exchanges, brokers, and dealers, like financial institutions, should be treated as financial institutions under the Bank Secrecy Act. This would compel them to follow strict anti-money laundering rules, verify customer identities, and conduct proper checks.

This puts crypto firms largely under the same anti-money-laundering regime as banks, even though some crypto companies had earlier argued that such regulations should not apply to them.

How does the bill ease SEC rules for crypto firms?

Crypto companies would be allowed to raise up to $50 million a year and up to $200 million in total without registering with the SEC, as other companies do when fundraising.

Crypto tokens tied to investment contracts could still be sold under this regime, but with a reduced regulatory burden compared with how securities are treated.

This exemption would make it harder for the SEC to claim that most token sales are illegal securities offerings — a position the regulator strongly pushed during former President Joe Biden’s administration.

How does the Clarity Act define a ‘decentralised’ crypto platform?

Many popular crypto platforms are "decentralised," meaning that users interact directly with one another, in contrast to traditional exchanges, for example, which sit in between trades.

These platforms claim they cannot comply with bank-like rules because they assume there is a legal entity controlling transactions and holding customer money.

The Clarity Act would set rules to decide whether a crypto platform is truly decentralised. If it fails to meet the criteria, it would be treated as a financial institution and would have to monitor transactions and report suspicious activity, as banks do. A platform would not qualify as “decentralised” if it can block users or give special privileges to certain users.

How will tokenised assets be governed?

Tokenisation generally refers to the process of turning financial assets - such as stocks, bonds and even real estate - into crypto assets. Crypto companies have been investing in tokenised stock trading ahead of expected moves by the SEC to allow companies to experiment with blockchain-based stock trading.

The bill makes clear that securities moved to the blockchain must still comply with existing securities laws. It also asks the SEC to study how tokenised securities should be regulated. For regulatory purposes, tokenised securities would generally be treated the same as the traditional assets they represent.