Crypto faces a setback in the Senate
A landmark crypto bill faces uncertainty after senators punted it until after their August recess.
08/07/2026 05:37 PM EDT
The cryptocurrency industry’s top Washington priority has run into a stinging setback in the U.S. Senate.
After GOP senators and crypto executives spent weeks publicly insisting that a floor vote on a sweeping bill to create new, industry-friendly rules governing digital assets was imminent, Senate Republicans are now set to leave for their August recess without taking the measure up, punting it instead to September.
The delay — one of many that have beset the so-called Clarity Act over the past year — is a significant blow that diminishes prospects for the bill. The legislation has been the subject of months of acrimonious bipartisan negotiations as well as a vicious lobbying spat between banks and crypto companies.
“I do think the odds drop precipitously,” said Sen. Thom Tillis, a retiring North Carolina Republican who has become a key player in negotiations on the bill. “We leave for a month, we come back, we’ve got an election ahead of us. I think it gets difficult to get done.”
The fresh skepticism about the fate of the Clarity Act shows how even an industry awash in campaign money and lobbying resources is struggling to get its longtime priority across the finish line. Senate Republicans have pledged to put the measure on the floor as soon as they return, but lawmakers will have a mere three weeks just ahead of the midterm elections to pass a bill that requires bipartisan support and features several contentious unresolved issues.
The 616-page bill, which would overhaul an array of arcane regulations to accommodate digital assets, carries outsize political importance. The crypto industry has threatened to unleash millions in super PAC money this election cycle against lawmakers who stand in the way. A super PAC network known as Fairshake ended June with more than $128 million in the bank — a titanic sum that has loomed large over the legislative effort as lawmakers in both parties eye the rapidly approaching midterm elections.
The crypto industry will now enter the August recess without the Senate naughty-and-nice list of its supporters and detractors that it desired to help inform its spending decisions.
The bill’s supporters say there is enough time to take up and pass the bill. Sen. Cynthia Lummis (R-Wyo.), the Senate’s leading crypto ally, said in a statement Friday that she is “frustrated” by the delay, but added: “We’ve come too far to quit now.”
“I will continue working with my colleagues to get this done— this fight is far from over,” she said.
Sen. Kirsten Gillibrand, a New York Democrat who has partnered for years with Lummis on industry-friendly crypto legislation, said she is “still optimistic.”
The delay “gives the staff several more weeks to work with the White House and to work with industry and to work with our Senate colleagues to button” down the remaining issues, she said.
Republicans blame Democrats for the delay. GOP leaders needed all 100 senators to sign off on a time agreement in order to complete the laundry list of items on their pre-recess to-do list without keeping members in Washington deep into next week. Democrats balked at going along with a time agreement to speed up consideration of the outstanding legislative business that would allow the Clarity Act to come up for a vote. They said they want bipartisan negotiations to continue and warned that if a vote came up without a deal locked in, it could go down on the floor and sink the entire effort.
A group of about a dozen Democrats has signaled openness to backing the crypto bill, but three main issues need to be resolved to secure their support. Most importantly, Democrats are pushing for an ethics provision that would crack down on President Donald Trump’s ability to profit off his family’s crypto businesses. Tillis and Sen. Ruben Gallego (D-Ariz.) teamed up on a counteroffer they sent to the White House last week after Democrats rejected previous ethics language offered up by Republicans that had the blessing of the president’s team.
It’s unclear how viable the Tillis-Gallego plan, which includes a divestment requirement for Trump, is for the White House and other Republicans. In addition to language that would likely force the president to divest from some of his crypto businesses, it includes a provision that would allow state attorneys general to sue the Justice Department for not enforcing the rules — an idea some GOP senators have thrown cold water on.
Beyond the ethics fight, Democrats are also pushing for changes to address concerns raised by law enforcement groups about the bill and for amendments to the commodities portion of the measure that is overseen by the Senate Agriculture Committee.
“I think there is a really good bipartisan pathway to getting this done if they will do on ethics what they should do, which is not allow a president or anybody else to grift off of their office,” said Sen. Cory Booker (D-N.J.), who is leading negotiations for Democrats on the issues under the Ag panel’s jurisdiction.
The bill is also facing headwinds among some Republicans, as banking groups push for changes that would crack down on crypto rewards programs that lenders say mimic old-school checking and savings accounts. At least two Republicans have said they plan to vote against the bill, citing concerns voiced by banks that crypto rewards programs could spark deposit flight and threaten their capacity to lend. The Wall Street Journal editorial board — influential in Republican circles in Washington — has twice sided with banks on the issue in recent days, pushing back against crypto companies that are accusing Wall Street groups of trying to ban their competition.
“The pressure from the banks — this is just a general impression — has given some people pause,” Sen. John Kennedy (R-La.), who supports the bill, told reporters Friday.
Kennedy, who sits on the Senate Banking Committee, called it a “mistake not to vote now.” He said he was “just reading a very critical article in the Wall Street Journal about the Clarity Act.”
With the delay, he said, “the pressure’s just gonna continue.”
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