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The revised measure would require non-decentralized DeFi protocols to register with the CFTC, aligning the provision with Section 10301 of the Senate Banking Committee's version. The changes were negotiated during the August recess.
Why it matters
The proposal draws a regulatory line around DeFi based on decentralization rather than treating the sector as a single category. It would also limit the DeFi provisions to spot or cash transactions in digital commodities, a change that appears aimed at addressing tribal concerns over blockchain-based prediction markets.
Market impact
For DeFi builders, the classification of a protocol as non-decentralized would determine whether the CFTC registration requirement applies. The update also further clarifies credit unions' authority to engage in crypto-related activities. The ethics, BRCA and stablecoin-yield provisions appear unchanged.
Frequently asked questions
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Which DeFi protocols would face the proposed CFTC registration requirement?
The requirement targets DeFi protocols classified as non-decentralized under the updated CLARITY Act.
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What transactions would the revised DeFi provisions cover?
They would be limited to spot or cash transactions in digital commodities.
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Why does the update limit DeFi provisions to spot or cash trades?
The limitation appears aimed at addressing tribal concerns over blockchain-based prediction markets.
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What crypto authority would the bill clarify for credit unions?
The update would further clarify credit unions' authority to engage in crypto-related activities.
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Which CLARITY Act provisions appear unchanged?
The ethics, BRCA and stablecoin-yield provisions appear unchanged in the updated version.
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