CLARITY Act Stalls: What’s Next for Crypto

The CLARITY Act — crypto’s long-awaited market-structure bill — has stalled into Congress’s August recess without reaching the Senate floor, leaving the industry’s biggest legislative priority in limbo until lawmakers return in September.

What was billed as a make-or-break stretch for digital-asset regulation ended without a vote, as bipartisan negotiators failed to resolve disputes over ethics, developer liability, and the makeup of the regulators that would oversee the industry.

For an industry that has spent years pushing for clear rules of the road, the delay is a familiar frustration — and a reminder that even with a friendly White House, passing major legislation through a narrowly divided Senate remains a heavy lift.

What the CLARITY Act is

The CLARITY Act — formally the Digital Asset Market Clarity Act — would create a regulatory framework for cryptocurrencies and other digital assets. It is the broad companion to the GENIUS Act, which covered only stablecoins and was quickly signed into law by President Trump last year.

The House passed its version of the bill in July 2025 by a 294–134 vote. The Senate has spent more than a year developing its own version, which passed the Agriculture Committee along partisan lines in January and cleared the Banking Committee in May.

Where the bill stands

The Senate Banking Committee advanced the CLARITY Act 15–9 on May 14, with all 13 Republicans joined by Democratic Sens. Ruben Gallego (Ariz.) and Angela Alsobrooks (Md.). Both warned that their committee votes did not guarantee support on the floor.

GOP leadership aimed to begin floor consideration in late July, but that window closed. As of early August, the bill had not cleared the Senate floor, and the August recess has now frozen it in place.

To cross the finish line, supporters need roughly seven Democratic votes — a tall order given the unresolved disputes.

The sticking points

Ethics. Democrats want limits on how elected officials — most notably the president — can participate in the crypto industry. The fight intensified after Trump’s financial disclosures showed about $1.2 billion in crypto-related income, including roughly $594 million from World Liberty Financial and $635 million tied to meme coins. Senate Democrats led by Elizabeth Warren and Dick Durbin argued the disclosures “heighten concerns” about the president pushing legislation that benefits an industry he profits from.

Developer liability. A provision shielding software developers from being treated as money transmitters has drawn opposition from law enforcement, who say the exemption is too broad and could make it harder to pursue bad actors. The Major County Sheriffs of America shifted from opposition to “neutral” last month, signaling possible momentum.

Regulator makeup. The bill tasks the SEC and CFTC with oversight, but the SEC currently has three Republican commissioners and no Democrats, while the CFTC is down to a single Republican commissioner. Democrats want two Democratic nominees on each body before moving forward.

The stablecoin rewards fight

The banking industry has been lobbying hard against a loophole it says the GENIUS Act left open — one that lets crypto firms offer stablecoin rewards through third parties despite an interest ban. Banks warn that such rewards could drain deposits they rely on for lending, and the Independent Community Bankers of America has run ads attacking the bill’s treatment of the issue.

What happens next

Congress returns in September with roughly three weeks in session before lawmakers shift into campaign mode ahead of the midterms. Stifel’s chief Washington policy strategist, Brian Gardner, has called a post-election “lame duck” passage “hypothetically possible, but unlikely,” noting that “the calendar is the enemy.”

If control of Congress shifts in November, the bill would likely be sent back to the starting line — a scenario that would push any resolution into 2027 or beyond.

Bottom line

The CLARITY Act remains crypto’s best shot at a comprehensive U.S. regulatory framework, but it is now running out of legislative runway. The August recess has turned the calendar into its biggest obstacle. For the industry, September is the moment of truth — and the outcome is still genuinely uncertain.