DIGITAL ASSET MARKET CLARITY ACT

On 2026-09-16, Senator John Cornyn (R-TX) delivered a floor speech titled "DIGITAL ASSET MARKET CLARITY ACT" in the Senate.

DIGITAL ASSET MARKET CLARITY ACT

Congressional Record, Volume 172 Issue 146 (Wednesday, September 16, 2026) [Congressional Record Volume 172, Number 146 (Wednesday, September 16, 2026)] [Senate] [Page S4753] From the Congressional Record Online through the Government Publishing Office [ www.gpo.gov ] DIGITAL ASSET MARKET CLARITY ACT Mr. CORNYN. Madam President, yesterday, I voted to proceed to debate on the Digital Asset Market Clarity Act, legislation to provide oversight for the digital asset industry. This is an important bill to protect investors, provide clear rules of the road, and promote innovation and entrepreneurship. However, I remain concerned about the bill's impact on community banks and law enforcement activities. First, we must ensure that digital asset third parties, such as crypto exchanges, cannot take advantage of loopholes in section 10404 to offer interest or yield-like payments on stablecoin balances. The Clarity Act should allow rewards to be generated to customers for transactions and similar activities while clearly prohibiting reward payments that are simply a workaround to provide yield or interest on a customer's balance in their stablecoin wallet. I do not believe the current text adequately prevents these types of rewards. If the yield and interest loopholes are not closed, community banks in Texas and across the Nation are at risk of facing significant deposit flight. Many community banks operate at high loan-to-deposit ratios, and if these banks' deposits start to slip away, their lending capacity will be immediately impacted. Community banks are the lifeblood of small and rural communities in Texas, providing access to capital to farmers, ranchers, and small businesses. I do not believe that the digital asset industry, despite the economic benefits that will come from innovation and entrepreneurship, will rise to fill a potential gap in community bank lending. Therefore, before proceeding to final passage of the Clarity Act, the Senate should preemptively protect community banks from deposit flight by implementing changes to section 10404 to ensure that the prohibition on interest and yield cannot be cleverly evaded. I also remain concerned with how the Clarity Act may impact law enforcement and national security. We know that scammers, drug cartels, terrorists, rogue states, and criminals of all kinds use cryptocurrency platforms to hide and launder money. For example, Mexican cartels take the bulk cash proceeds of their drug sales and often provide them to third-party brokers who convert the cash into cryptocurrency. The cryptocurrency is then moved through a network of different wallets, using layering techniques and conversions between different cryptocurrencies before eventually being cashed out for fiat currency. Cryptocurrency may also be moved through mixers to help hide its ownership, as North Korea's Lazarus Group has done through Tornado Cash, a Decentralized Finance (DeFi) mixer. Multiple sections in the Clarity Act make it extremely challenging to combat money laundering, particularly when done through DeFi platforms. The most problematic provision is section 10604, the Blockchain Regulatory Certainty Act. That section, as recently amended, would insulate DeFi platforms, including mixers like Tornado Cash, from being classified as financial institutions by the Treasury Department, ensuring they are not subject to Bank Secrecy Act requirements, including basic anti-money laundering requirements. Further, section 10604 states that the Financial Crimes Enforcement Network cannot regulate DeFi platforms as money transmitters under its current regulations ``or any successor regulation.'' But perhaps most troubling, section 10604 severely hampers prosecutors' ability to use 18 U.S.C. Sec. 1960, the prohibition of unlicensed money transmitting businesses statute, to charge DeFi platforms who enable money laundering. This is the statute which Roman Storm, one of the creators of Tornado Cash, originally faced multiple charges under before eventually being convicted of conspiracy to violate section 1960(b)(1)(C). In addition to my concerns with section 10604, I remain concerned with section 10201 and its impact on sanctions; section 10301, which omits certain platforms from the rulemaking on Bank Secrecy Act requirements; the rule of construction in section 10302; and ensuring that the Federal grants impacted by section 10901 are adequately funded to support that provision's goals as well as existing programs reliant on those grants. ____________________