Key facts
- Senate Republicans believe the CLARITY Act, a crypto market structure bill, is likely to fail.
- A key sticking point is an ethics provision related to President Trump and his family's potential profit from crypto assets.
- Senator Thom Tillis stated the bill's success hinges on White House approval of the ethics language.
- The Senate is scheduled to hold a cloture vote on September 15.
- The House of Representatives has canceled sessions, potentially jeopardizing the bill's passage before the November midterm elections.
The CLARITY Act, a significant piece of cryptocurrency legislation, faces potential failure in the U.S. Senate due to a dispute over ethics rules concerning President Trump and his family. Senate Republicans have warned that the bill is unlikely to pass when the chamber reconvenes next week, citing a lack of progress on the ethics provision demanded by Democrats.
Democratic aides indicated that there has been minimal movement on the ethics clause, which aims to prevent the President and his family from profiting from crypto assets. Senator Mike Rounds expressed pessimism about the bill's progress, stating it "does not look good right now." Senator Thom Tillis, a key negotiator, emphasized that the bill's passage is contingent on the White House agreeing to the ethics language.
A White House spokesperson, however, affirmed President Trump's unequivocal support for the CLARITY Act, urging Congress to pass it to maintain U.S. leadership in innovation and stay ahead of foreign competitors. Democrats, meanwhile, continue to criticize the proposed ethics provision as weak, arguing it inadequately addresses family businesses and expressing skepticism about federal oversight, preferring state attorneys general.
Concerns have also been raised by community banks and some Republican senators regarding the bill's treatment of stablecoin rewards, with fears of deposit flight. Senators Josh Hawley and Rand Paul are noted as potential "no" votes on the current text, with others seeking further bank-friendly amendments.
The Senate is scheduled to hold a cloture vote on September 15, which, if successful, would limit further debate. However, the U.S. House of Representatives has canceled sessions for the final two weeks of September, heading for a midterm election recess by September 17. This scheduling conflict puts the CLARITY Act at risk of not becoming law this month, even if the Senate approves it. Consequently, odds of the bill being signed into law in 2026 have significantly decreased on Polymarket.