- The Senate left town for August recess without voting on a cryptocurrency regulation bill, dimming the measure’s chances of passing before the midterm elections.
- Senate Majority Leader John Thune (R-S.D.) announced that the Clarity Act would head to the floor in September, citing insistence from Democrats on no vote before recess.
- Sen. Thom Tillis (R-N.C.) said the likelihood of passing the bill 'probably drops in half' after the vote was postponed.
- The Clarity Act, which would create a regulatory framework for the crypto sector, may still clear the Senate in a brief three-week session in September, but the odds are seen as lower.
- A key holdup is an ethics provision that would bar elected officials from profiting off the crypto industry, with disagreements over enforcement between the Department of Justice (DOJ) and state attorneys general.
- A counteroffer from Tillis and Sen. Ruben Gallego (D-Ariz.) would require officials to divest some crypto assets, but it remains unclear whether President Trump will accept it.
- Sen. Josh Hawley (R-Mo.) and other Republicans have concerns about the Clarity Act’s impact on community banks, particularly regarding stablecoin loopholes that could cause deposit flight.
- Republican leadership likely lacked enough GOP support to hold an 'effective vote,' and the timeline for September is tight, with Ian Katz noting it could 'go down to the wire.'
The Senate's decision to leave for August recess without voting on the Clarity Act has raised concerns about the bill's future. Senate Majority Leader John Thune announced the bill would be addressed in September, but the timeline is tight with only three weeks before the midterms.56
Ian Katz, managing partner at Capital Alpha, noted, “I do think the odds drop in September.” He emphasized the limited legislative days and competing priorities.1516
Sen. Thom Tillis remarked that the likelihood of passing the bill has “probably dropped in half.” Meanwhile, Senate Democrats are advocating for stricter ethics provisions regarding elected officials' involvement in the crypto industry, complicating the bill's progress.7891011
The White House has proposed an ethics provision to ban public officials from profiting off digital assets, but it faces pushback from Democrats over enforcement mechanisms. “I’m open to being persuaded on this,” said Sen. Josh Hawley, expressing concerns about the bill's impact on community banks.121314
As the industry looks to September, Katz warned, “It’s possible. It’s really difficult though.” The situation remains fluid as lawmakers return to a packed agenda, with the Clarity Act's fate hanging in the balance.
“Senate Majority Leader John Thune announced the bill would head to the floor in September, but Sen. Thom Tillis said the likelihood 'probably drops in half' after the postponement. A key holdup is an ethics provision barring officials from profiting off crypto, with disputes over DOJ vs. state attorneys general enforcement.”
