Clarity Act faces long odds as Democrats reject ethics language
In brief
- Thune signals Clarity Act won't clear Senate before August recess
- Democrats rejected GOP ethics language barring federal officials from issuing digital assets
- Fall midterm campaigning expected to dim passage prospects this year
The GOP's Latest Pitch Falls Flat
Republicans released updated 616-page text on Wednesday that would bar federal officials, including the president, from issuing or sponsoring digital assets. The move was meant to address Democratic concerns about conflicts of interest. It didn't work.
Roughly seven Democrats, among them Angela Alsobrooks, Mark Warner, and Catherine Cortez Masto, say they can't support the current draft. Even Senator Ruben Gallego, one of only two Democrats to back the bill in committee, told Politico the GOP offer was not a serious effort. The ethics fight has become a bottleneck.
Time Is Running Out
Thune said he still hopes to begin the floor process before the August recess, though he doesn't expect the bill to clear by then. That distinction matters. Missing the August window is a serious setback. With midterm campaigning set to dominate the fall, dragging the vote into September or later would dim the bill's odds of becoming law this year.
Prediction markets and analysts have grown gloomier. Galaxy Research, which has steadily trimmed its forecast as the calendar tightened, now sees passage as unlikely before year-end.
Industry Pushes Back
Three major crypto trade groups—the Digital Chamber, Crypto Council for Innovation, and Blockchain Association—urged Senate leadership to start floor consideration immediately. Kristin Smith, Solana Institute President and former Blockchain Association CEO, insisted there's still a clear path to pass before August 7. Industry consensus is that delay is death.
The stakes are high. The Clarity Act, if passed and signed into law, would formally legalize most cryptocurrency activity in the United States and draw jurisdictional lines placing most crypto assets outside the hands of the SEC, under CFTC purview instead. For the industry, passage is existential. For Democrats, the ethics guardrails matter more than speed. That collision is what's stalling the chamber now.
