Senate Delays Clarity Act Vote Until September Amid Political Disputes

Key Takeaways

• The U.S. Senate will not vote on the Clarity Act in August and is pushing consideration to September.
• Senate Majority Leader John Thune confirmed that lawmakers will queue up the bill upon their return from recess.
• The Senate is expected to reschedule on September 14, leaving roughly three weeks to work on the legislation.
• Leading sticking points include ethics provisions, stablecoin rewards, law-enforcement concerns, and other provisions from the Senate committees.

The U.S. Senate will not vote on the Clarity Act before its August recess. However, the industry leaders still hope for a vote in September, when senators return to Washington, D.C.

In a statement through a spokesperson, Senate Majority Leader John Thune confirmed that there would not be a vote on Clarity in August. But there are chances for the next month.

He said, “The Dems are insistent on no Clarity vote. I worked with sponsors of the bill. [Senator Cynthia Lummis] was great, and we’re getting that queued up first thing when we come back.”

Politico first reported Thursday that the Senate did not expect to hold a vote on the Clarity Act bill before the recess.  

The U.S. Senate is set to leave on a month-long recess, starting on Friday. Senators are expected to return to Washington in mid-September for a few weeks. Attention is likely to shift to elections in November, leaving the few weeks in September pivotal to passing crypto legislation.

Crypto trade group Digital Chamber CEO Cody Carbone, in a statement shared with CoinDesk, said, “While this isn’t the result any of us hoped for when we began the week, the fight is far from over. The next few weeks, we will continue to work to find the last pieces of common ground needed to set up a successful vote when Congress returns in September.”

Crypto Council for Innovation CEO Ji Hun Kim said, “Our efforts will not stop here. CCI will keep working with Senators on both sides of the aisle, their staff, and the Administration until the Clarity Act is signed into law.”

The Clarity Act needs 60 votes in the Senate to pass. However, it seems unclear if it even has 50 votes currently, with multiple Republican senators publicly announcing their opposition and Democrats calling for President Trump to agree to a stricter ethics provision than exists in the bill today.

Key Disputes Holding Up the Clarity Act

Lawmakers have agreed on most of their outstanding issues on the bill, which has seen approval from the Senate Banking Committee and Agriculture Committee. However, several contentious issues have halted its progress.

One early issue that was highlighted was how to regulate stablecoin rewards. It allows users to earn interest on deposited funds. But the debate quickly turned into a broader clash between the crypto industry and the banking sector.

In an interview with Fox Business, JPMorgan Chase CEO Jamie Dimon blasted Coinbase CEO Brian Armstrong as "full of sh–.”

Ethics concerns loom over negotiations. These are particularly related to Trump’s cryptocurrency holdings and business interests. His crypto ventures, from the launch of his memecoin to his family’s ties to World Liberty Financial, are currently estimated to be worth millions of dollars.

Trump agreed to an ethics provision proposed by Sen. Cynthia Lummis. But Senate Democrats and some Republicans, including Thom Tillis, raised concerns about the language. Tillis and Sen. Ruben Gallego later proposed an alternative and sent it to the White House in late July. It also includes language requiring him to divest from crypto-related business, as reported by Bloomberg.

The White House had not publicly responded as of the time of reporting.  

Additionally, concerns over illicit finance have also remained a recurring sticking point. Some lawmakers have argued that the Clarity Act does not provide law enforcement and consumer protection agencies with efficient tools to police illicit activity.

Now, the next procedural question remains when Thune will file for cloture on the Clarity Act. If he files before the Senate leaves this month, the first procedural vote on the bill can be expected as soon as September 15. But if he files afterwards, the vote could be held no earlier than September 16.

 

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