Key facts
- The US Senate will vote Tuesday on advancing the Clarity Act, a crypto bill.
- Bitcoin fell 2.39% to $76,314 amid uncertainty over the bill's passage.
- Republicans claim their revised Clarity Act text includes 126 substantive changes requested by Democrats.
- Democrats submitted a counteroffer seeking tighter ethics provisions and further changes to the Blockchain Regulatory Certainty Act.
- The White House has signaled a limited appetite for further talks on the Clarity Act.
- Banking trade groups argue the proposed stablecoin "circuit breaker" is ineffective.
The US Senate is set to vote Tuesday on advancing the Clarity Act, a comprehensive bill aimed at establishing a market structure for digital assets. The vote, requiring 60 senators to invoke cloture, comes after months of negotiations and follows the release of a revised bill text by Senate Republicans on Sunday evening.
Republicans stated their latest draft incorporates 126 substantive changes requested by Democrats, including concessions on ethics, developer protections, and the Ag title, along with a new "circuit breaker" mechanism designed to prevent deposit flight from community banks to stablecoins. However, Senate Democrats submitted a counteroffer late Monday, seeking additional restrictions on crypto holdings for officials and their dependents, further changes to the Blockchain Regulatory Certainty Act, and tighter rules around exchanges and conflicts of interest in the Ag title.
Republicans criticized the Democratic counteroffer, with a spokesperson for the Senate Banking Committee accusing Democrats of "moving the goalposts again." The White House has signaled a limited appetite for further talks, with one official suggesting any remaining changes would be "punctuation at this point or technical changes."
Despite concessions, some Senate Republicans remain undecided due to objections from the banking industry. Trade groups, including the American Bankers Association and Independent Community Bankers of America, argue the proposed "circuit breaker" is insufficient and have called for stricter rules on stablecoin rewards. The White House, through its Council of Economic Advisers, has pushed back on the banking industry's deposit flight argument, suggesting "no meaningful relationship between stablecoin growth and community bank deposit flight."
Separately, the crypto market faces volatility ahead of the US Federal Reserve's monetary policy decision, with markets expecting a potential 25 basis point rate hike. US President Donald Trump has indicated respect for the Fed's independence in its decision-making.