President Donald Trump has agreed to most of a new ethics proposal tied to the CLARITY Act, giving the major digital asset bill a better chance of moving through the Senate this week.

Senate Republicans released what they called the final version of the bill on Sunday, ahead of a key procedural vote later today.

The CLARITY Act is designed to create clearer rules for the US digital asset industry and define which regulators will oversee different digital assets. But the bill has been stuck for months because Democrats have demanded stronger ethics rules, particularly because of Trump's personal and family ties to the industry.

The original bill would have stopped federally elected officials, their spouses and federal judges from issuing digital assets.

Democrats and Republican Senator Thom Tillis of North Carolina said that was not enough. They wanted rules that would also address officials' personal digital asset investments.

Tillis and Democratic Senator Ruben Gallego of Arizona proposed allowing state attorneys general to help enforce the law. They also wanted officials to sell their digital-asset-related holdings or put them in a blind trust.

Trump has now agreed to most of that proposal.

A senior Republican aide said Trump agreed to “about 80%” of the Tillis-Gallego proposal.
Under the updated bill, federal officials, judges and their spouses would have to either sell significant financial interests in companies that issue digital assets or place those investments in a blind trust.

They would also be prohibited from issuing or sponsoring digital assets while in office.

In a potentially related development, wallets linked to the Trump family reportedly moved billions of dollars worth of World Liberty Financial’s $WLFI tokens.

Four wallets had simultaneously transferred their holdings into the token’s “vesting contract” on May 19. A vesting contract is essentially a smart contract that locks digital assets for a set period of time before they can be moved or sold. That period now seems to be over.

One of the allocations matched the stake disclosed by Donald Trump, while three others corresponded with allocations believed to be held by family members.

The bill would give state attorneys general a role in enforcing the rules alongside the Justice Department. They could also sue digital asset exchanges that list digital assets banned under the legislation.

That was an important demand for Democrats, who had questioned whether the Justice Department alone could fairly enforce ethics rules involving a president.

Senator Cynthia Lummis, one of the main Republican sponsors of the bill, said Trump had “voluntarily agreed to new ethics provisions.”

“Democrats got what they wanted; now they need to take yes for an answer,” Lummis said.
The ethics fight is closely linked to Trump's growing involvement in digital assets.

Trump and his family have connections to several related businesses, including the $TRUMP and $MELANIA meme coin and World Liberty Financial.

His digital-asset-related financial interests have raised concerns among Democrats and other critics, who say public officials should not be able to make decisions affecting an industry in which they have significant personal investments.

The White House had previously been concerned about giving state attorneys general enforcement powers. Officials argued that state prosecutors could potentially use the authority for political reasons.

Trump nevertheless agreed to give state attorneys general what Republican lawmakers called a “meaningful role” in enforcing the new rules.

The ethics agreement is not the only issue facing the CLARITY Act. Banks have been pushing for stronger restrictions on stablecoin rewards and yield.

Their concern is simple: if stablecoin companies can offer attractive rewards, customers could move money out of bank accounts and into stablecoins. Community banks say that could reduce the deposits they use to make loans to small businesses, farmers and families.

The updated bill includes a compromise. It would give the Treasury secretary power to restrict stablecoin rewards if community banks suffer substantial deposit outflows.

However, banking groups say the changes may not go far enough.

The American Bankers Association and nearly 80 other banking organizations have called for stronger protections.

“We remain optimistic that the Senate will ultimately consider an improved Clarity Act that embraces innovation without undermining the economy,” said Brooke Ybarra, a senior vice president at the association.

Republican lawmakers have described the latest version as their “last, best and final” offer to Democrats.