The U.S. Senate Banking Committee released an amended version of the CLARITY crypto market structure bill that reflects rules on stablecoin rewards and provisions protecting DeFi developers. Ethics language addressing potential conflicts of interest involving U.S. President Donald Trump and his family’s crypto businesses was left out, emerging as the biggest political variable in the bill’s path.

On May 12, blockchain outlet The Block reported that Crypto America host Eleanor Terrett said the Senate Banking Committee released the 309-page amendment on Monday night.

Senate Banking Committee Chairman Tim Scott said in a statement the bill was the result of serious and sincere work within the committee. He said it contains clarity, safeguards and accountability Americans need. He described it as legislation focused on protecting consumers, blocking illicit finance, cracking down on foreign adversaries and criminal organisations, and maintaining the competitiveness of the U.S. financial industry.

The review and vote are drawing attention as the first full-fledged legislative process to comprehensively regulate the crypto industry at the U.S. federal level. The committee initially pushed to begin review in January, but the schedule was delayed after Coinbase withdrew its support over issues including rules on stablecoin rewards.

One key element of the amendment is a provision limiting stablecoin rewards. With language agreed by Senators Angela Alsobrooks and Thom Tillis reflected in the text, it restricts certain operators from providing returns that are effectively similar to deposit interest in exchange for holding stablecoins. It is a measure aimed at preventing stablecoins from replacing bank deposits.

The crypto industry and Coinbase are largely accepting the amendment, but large banks are still pushing back. Rob Nichols, chief executive of the American Bankers Association, argued the current text could unnecessarily shift bank deposits to payment stablecoins and harm financial stability.

Rules related to DeFi are also a major focus. The amendment includes language from the "Blockchain Regulatory Clarity Act" and sets out the principle that non-custodial developers who do not directly control user funds are not treated as money transmitters. This is a core protection sought by the DeFi industry.

Law enforcement agencies and some lawmakers have warned the provision could create gaps in efforts to crack down on financial crime. As a result, Senators Chuck Grassley and Cynthia Lummis discussed a compromise, and the amendment is reported to include language that partly reflects concerns about money laundering and criminal investigations.

The DeFi Education Fund described the amendment as positive, saying it was encouraged by the recent direction of negotiations. It placed importance on the fact that protections for developers and infrastructure providers were maintained.

The biggest political issue remains the ethics provisions. Democrats maintain that language limiting digital-asset conflicts of interest for the president and senior officials must be included. The latest amendment again did not reflect that content.

At the centre of the controversy are crypto businesses tied to the Trump family. Bloomberg estimated the Trump family earned at least $1.4 billion in profits through a Trump-related memecoin, a Melania Trump memecoin, and the family-involved DeFi and stablecoin project World Liberty Financial (WLFI).

Key Democrats are strongly opposed. Senator Kirsten Gillibrand previously said it would be difficult to support the bill without ethics provisions, and Alsobrooks' side also stressed that compromise on conflicts of interest is needed for bipartisan agreement.

Senator Elizabeth Warren criticised the bill shortly after the amendment was released, saying it could fuel Trump’s crypto corruption and could put the financial system and national security at risk. She said there are no measures to stop the president and his family from making large sums from crypto businesses.

The bill must go through Senate Banking Committee review and then be reconciled with a similar bill that has passed the Senate Agriculture Committee. Final passage in the full Senate will require 60 votes, making Democratic cooperation essential.

As a result, this week’s review is expected to hinge not only on stablecoin rules and the scope of DeFi protections, but also on how to address conflicts of interest involving the Trump family.