The Clarity Act, a significant piece of legislation aimed at reshaping federal oversight of digital assets, has been delayed in the U.S. Senate and will not come to a vote before the chamber's August recess. This setback comes despite the crypto industry pouring close to $200 million into the current election cycle, with much of that funding directed through major PACs like Fairshake to support pro-crypto candidates. The industry has been actively pushing for the bill's passage, viewing this period as 'crunch time' for legislation.
Several issues have contributed to the bill's stalled progress. Key sticking points include provisions related to stablecoin rewards, concerns about illicit finance, and ethics clauses, particularly those involving former President Trump. Banks have opposed provisions that would allow stablecoin issuers to offer yield-bearing products, fearing a drain on deposits and reduced lending capacity. While crypto companies have expressed willingness to compromise, banks remain resistant, indicating that proposed compromises still allow for activities that could trigger deposit flight.
Republicans, needing roughly six Democratic crossovers to pass the bill, have faced resistance from Democrats who are reportedly reluctant to vote on the bill ahead of midterm elections, given the crypto industry's growing political influence. Senate Majority Leader John Thune confirmed the delay, noting Democratic insistence on no Clarity vote before the recess. The bill's vote has now been pushed to September, leaving a narrow window for passage before campaigning intensifies for the November elections. Should it pass the Senate, it would still need to return to the House for another vote before reaching the President's desk.
