Key facts
- The CLARITY Act advanced from the Senate Banking Committee with a 15-9 vote.
- The bill requires 60 votes in the full Senate to overcome a filibuster.
- Unresolved issues include ethics provisions and reconciliation with the Senate Agriculture Committee's work.
- Amendments on ethics for government officials and Treasury sanctions on DeFi services failed.
- A compromise on stablecoins, banning passive yield while allowing activity-based rewards, was retained.
- Enforceable regulations are not expected until 2027, even if the bill passes.
The CLARITY Act has cleared a significant hurdle with its advancement from the Senate Banking Committee in a 15-9 vote, but its path to becoming law remains uncertain. The bill now faces the full Senate, where it will need 60 votes to overcome a potential filibuster.
While the committee vote saw all 13 Republicans in favor, along with Democrats Ruben Gallego and Angela Alsobrooks, their support is conditional. Both senators indicated that while they voted to advance the bill in good faith, unresolved issues, including ethics provisions and alignment with parallel work in the Senate Agriculture Committee, must be addressed before they can lend their final approval.
The markup session involved over 100 amendments. A compromise on stablecoins, banning passive yield while allowing activity-based rewards, survived banking lobby pressure. However, an amendment proposed by Senator Chris Van Hollen to bar senior government officials from certain crypto business interests failed, as did an amendment by Senator Elizabeth Warren that would have given the Treasury authority to sanction DeFi services. Several technical amendments from Senator Cynthia Lummis did receive broad bipartisan support.
Crypto lobbyists are actively working to secure the necessary votes for passage, with hopes for a July vote. Ric Edelman, founder of the Digital Assets Council of Financial Professionals, believes the CLARITY Act is the biggest catalyst for institutional capital to enter the crypto market, predicting that 95% of institutions not currently invested will allocate this year if it passes. He also noted that crypto prices are not reflecting current industry uptake and that major Wall Street firms are increasing blockchain and tokenization initiatives. However, he cautioned that delays could negatively impact market sentiment. Even in the most optimistic scenario, enforceable regulations are not expected until 2027.