Senate abandons August CLARITY Act vote – leaving 14 ‘work days’ until midterm election season kills it

The US Senate has abandoned plans to vote on the landmark CLARITY Act legislation before its August break.

On Aug. 6, Senate Majority Leader John Thune confirmed that the legislation will have to wait until lawmakers return Sept. 14, reversing his earlier expectation that the Senate would act before leaving Washington.

A spokesperson for the lawmaker said on X:

“The Dems are insistent on no Clarity vote… I worked with sponsors of the bill…and we’re getting that queued up first thing when we come back.”

The retreat caps weeks of pressure from crypto executives and Republican lawmakers who had pushed for senators to vote before the recess.

Consequently, prediction traders have marked down the bill's prospects for this year. A Polymarket contract on whether CLARITY will be signed into law by the end of 2026 put the probability at about 14%, after odds had risen above 80% earlier this year.

Why did the CLARITY Act stall?

CLARITY stalled because Republican negotiators could not resolve the banking, ethics, and illicit-finance disputes needed to assemble 60 Senate votes to advance the legislation.

One complication emerged from within their own ranks as Sen. Jerry Moran of Kansas indicated he wants changes favored by banks before supporting the legislation, making the path to 60 votes more difficult.

Over the past few months, banks have been pushing lawmakers to restrict rewards that crypto exchanges and other intermediaries can pay customers for holding stablecoins.

The GENIUS Act already bars stablecoin issuers from directly paying interest or yield, but banking groups argue that exchanges could circumvent that restriction by offering similar rewards themselves.

They contend such products could pull deposits from traditional banks and reduce money available for lending. Crypto companies argue that extending the restriction would protect banks from competition.

Sens. Thom Tillis and Angela Alsobrooks attempted to bridge the divide in May with language distinguishing passive rewards from incentives tied to payments and other activity.

However, banking groups said the compromise did not go far enough, leaving the issue unresolved as senators approached the recess.

Meanwhile, the Democrats needed to reach the 60-vote threshold have also highlighted separate concerns with the bill.

Several Democratic lawmakers are demanding stronger safeguards against money laundering, sanctions evasion and other illicit uses of digital assets. They are also seeking restrictions on senior government officials profiting from crypto businesses, an issue sharpened by the Trump family's extensive involvement in the industry.

A bipartisan ethics proposal sent to the White House would require Trump to divest from crypto-related businesses, Bloomberg reported. But the proposal could also allow him to defer capital gains taxes associated with the divestment, adding another complication to negotiations.

Sen. Chris Van Hollen captured the broader Democratic resistance this week when he said the CLARITY Act was “not ready for prime time,” pointing to unresolved financial-stability and illicit-finance concerns.

September leaves CLARITY little room for another miss

Those unresolved disputes will now have to be settled against a calendar that offers senators little room for another failed attempt.

The Senate reconvenes Sept. 14 but is scheduled to be away again Sept. 21. Another state work period begins Oct. 5 and runs through Nov. 6, leaving roughly 14 scheduled weekdays in Washington before lawmakers scatter for the final stretch of the midterm campaign.

CLARITY will also have to compete for floor time with government funding, nominations and other unfinished legislation.

Even securing those 60 votes during that window would not finish the process, as any Senate version that differs from the measure already passed by the House would have to be reconciled before final legislation could reach Trump's desk.

That leaves supporters with little margin for negotiations to slip again. Failure to make substantial progress before the October break would increasingly push CLARITY into the post-election lame-duck session in November and December, when Congress typically faces a backlog of unfinished business.

The larger deadline comes in January, when the current Congress expires. Any legislation that has not completed the process by then would die and have to be introduced and advanced again in the next Congress.

September therefore represents more than another attempt at the vote senators skipped in August. It is the last relatively clear window for lawmakers to move the bill before election politics, year-end deadlines and the expiration of Congress sharply narrow its path.

Crypto industry turns to September after failed August push

Despite the setback, crypto executives and lobbyists are treating September as the next opportunity to salvage legislation they still view as essential to the industry's future in the US.

The Digital Chamber CEO Cody Carbone acknowledged disappointment over the failed August push but said negotiations would continue during the recess in an effort to build enough support for a vote when senators return.

“The fight is far from over,” Carbone said, adding that the organization would spend the coming weeks trying to narrow the remaining disagreements.

Coinbase CEO Brian Armstrong took a harder line, arguing that lawmakers had already spent a year negotiating the bill and had made substantial concessions across party and industry lines.

He pointed to hundreds of pages of revisions, agreements over SEC and CFTC nominations and new ethics commitments, while saying both the crypto and banking industries had compromised.

Armstrong said:

“No one gets everything. Everyone gets most of what they need. At this point, the only thing left isn't negotiation, it's whether some group will try to stall or block legislation that already has broad bipartisan support.”

He called on Senate leaders to put the bill to a vote, arguing that millions of Americans who own crypto were watching the process.

Sen. Dave McCormick renewed the economic case for passage following the delay, warning that prolonged regulatory uncertainty could push jobs, investment and technology development outside the US.

The advocacy campaign now shifts into the recess, when industry groups will have several weeks to press senators and seek compromises on the issues that prevented a 60-vote coalition from forming.

When lawmakers return Sept. 14, supporters will finally face the test that August never produced: whether enough Republicans and Democrats can be assembled to move CLARITY through the Senate.

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