Clarity Act stalls in Senate amid ethics dispute, shrinking calendar
Regulation & Gov ·
Senate Majority Leader John Thune says the crypto market-structure bill probably won't get a floor vote before lawmakers leave for August recess, as Democrats balk at Republican-drafted ethics provisions.
The measure, which would establish a regulatory framework for U.S. digital-asset markets, is running out of legislative runway, according to Decrypt. Thune told reporters Thursday he still hopes to open floor debate before the break, but acknowledged there may not be enough time to finish. If the vote slides into September, midterm campaigning is expected to consume the Senate's attention through the fall, reducing the chances the bill becomes law this year. Analysts tracking the process have already lowered their expectations: Galaxy Research has cut its estimate for 2026 passage odds to 30 percent, citing unresolved fights over stablecoin yield and official conduct, per wublockchain.xyz.
The immediate obstacle is a dispute over ethics language. An updated 616-page draft released by Republicans on Wednesday would prohibit federal officials, including the president, from issuing or promoting digital assets, with enforcement left to the Justice Department alone. Democrats whose support is needed to clear the 60-vote threshold have rejected that text. Sen. Ruben Gallego, one of two Democrats who backed the bill at the committee stage, called the GOP proposal an inadequate response after months of negotiation and said he would submit alternative language. He is now coordinating with Sen. Thom Tillis, who has signaled conditional support for the broader package but wants firmer restrictions on officials profiting from crypto holdings.
About seven Democratic senators, including Angela Alsobrooks, Mark Warner and Catherine Cortez Masto, have said the current draft does not do enough on ethics and illicit-finance safeguards. Talks between the two sides are expected to continue over the weekend in an effort to narrow the gap before the recess deadline.
Industry groups are pushing leadership to proceed regardless of the impasse. The Digital Chamber, the Crypto Council for Innovation and the Blockchain Association sent a joint letter to Thune and Minority Leader Chuck Schumer urging them to begin floor consideration even while negotiations continue, arguing that a durable market-structure law has no substitute. Not everyone agrees with Thune's timeline: Kristin Smith, president of the Solana Institute and former head of the Blockchain Association, wrote on X that his framing does not match private conversations she has had, insisting there remains a clear path to passage before the August 7 recess.
What remains unsettled is whether Gallego's counteroffer on ethics language can bridge the divide quickly enough to salvage a pre-recess vote, and whether the seven Democratic holdouts will move before the floor calendar closes.