President Trump agreed to accept what Senator Cynthia Lummis called “the toughest ethics restrictions” to get the Clarity Act to a Tuesday vote, handing state attorneys general standing to sue federal officials over conflict-of-interest violations. The Wyoming Republican posted the development on X Monday, crediting Trump directly for the concession that removed one obstacle to the crypto bill’s passage.
The ethics framework gives states enforcement power, a rare check on federal actors. Whether it’s enough to secure the votes remains uncertain. Bernstein analysts said Monday that the crypto market hasn’t priced in a Clarity Act surprise, noting that ethics and banking concessions have improved the bill’s prospects but Democratic support is still an open question.
Banking Groups Demand Stablecoin Reward Caps
Eight banking groups escalated their fight Monday, calling for tighter limits on stablecoin rewards. The move keeps the banks-versus-crypto dispute alive in Congress, with traditional finance continuing to push for constraints on yield-bearing dollar tokens that compete directly with deposit products. The banking coalition didn’t specify exact caps, but the timing, one day before the Senate vote, signals coordinated pressure to water down provisions that would allow stablecoin issuers to offer interest or rewards to holders.
Stablecoin rewards have been a flashpoint since the bill’s drafting. Banks argue that unregulated dollar tokens offering yield undercut deposit insurance protections and tilt the playing field. Crypto advocates counter that programmable money shouldn’t be hobbled to protect legacy moats. The Clarity Act as written distinguishes oversight between the SEC and CFTC, but the stablecoin provisions remain contested ground.
State AGs Push Back on Oversight Weakening
Eighteen state attorneys general raised concerns that the revised legislation would weaken state oversight, according to Cointelegraph. The complaint contradicts Lummis’s framing of the ethics deal as a win for state enforcement power. The AGs’ objection suggests the bill’s federalism balance is still disputed, with states worried that clearer federal lines mean narrower state jurisdiction over crypto firms operating within their borders.
Trump’s ethics concession addresses one hurdle. It doesn’t resolve the stablecoin reward fight or the state oversight objections. The vote is Tuesday. The bill has been years in the making, and it’s coming down to whether Trump’s willingness to accept constraints on his own officials, and whatever backroom dealing happens overnight, can pull enough senators across the line.
