- The Senate left town without voting on the Clarity Act, dimming its chances of passing.
- Senate Majority Leader John Thune (R-S.D.) announced Thursday that the Clarity Act would head to the floor in September instead of before recess.
- Sen. Thom Tillis (R-N.C.) stated that the likelihood of getting the bill done 'probably drops in half' after the vote was postponed.
- Analysts have noted a tight September timeline and a lack of GOP support for an 'effective vote'.
- The White House agreed to a Republican ethics provision banning public officials and spouses from issuing or sponsoring digital assets, but faced pushback from Senate Democrats who favored state attorneys general for enforcement.
- Sen. Josh Hawley (R-Mo.) expressed concerns about the Clarity Act's impact on community banks, particularly regarding stablecoin loopholes and potential deposit flight.
- The central holdup in negotiations is an ethics provision, with Senate Democrats pushing for language barring elected officials from profiting off the industry.
The Senate's failure to vote on the Clarity Act before its August recess has significantly dimmed the bill's prospects for passage ahead of the midterm elections.
Senate Majority Leader John Thune (R-S.D.) announced that the bill is queued for a vote in September, but an ethics provision remains a central issue. “The Dems are insistent on no Clarity vote,” Thune stated, acknowledging the ongoing negotiations with sponsors, including Sen. Cynthia Lummis (R-Wyo.).
The ethics provision, which aims to prevent elected officials from profiting off the crypto industry, has faced resistance from Senate Democrats. “I do think the odds drop in September,” said Ian Katz, managing partner at Capital Alpha, highlighting the tight legislative window.
Concerns have also been raised about the bill's potential impact on community banks. Sen. Josh Hawley (R-Mo.) expressed worries that the legislation could lead to a significant shift of deposits away from these institutions, stating, “My farmers in particular, are very, very worried that this will cause massive flight from community banks.”
As the crypto industry looks to the September session, the likelihood of passing the Clarity Act appears uncertain, with Sen. Thom Tillis (R-N.C.) suggesting that the chances of success have dropped significantly.
“They have three weeks. It’s possible. It’s really difficult though,” Katz cautioned, indicating that the timeline is tight and other legislative priorities may overshadow the bill.
“Senate Majority Leader John Thune (R-S.D.) announced the bill would head to the floor in September, citing Democratic insistence on no vote. Sen. Thom Tillis (R-N.C.) said the likelihood of passage 'probably drops in half' after the punt, while analysts warn the three-week session is tight.”
