The US Senate is scheduled to convene at 3 PM today. The upper house of Congress will be in session this week, but the summer recess will kick in at the end of the week, with Senators not scheduled to return until September 14th. As of this writing, the CLARITY Act, the vital crypto market infrastructure legislation, has yet to be placed on the calendar for a floor vote, as the possibility of a vote diminishes and a possible vote in the fall rises.
The bill has been in limbo on the Senate Legislative Calendar since June 1st.
Senator John Thune, the majority leader who controls the schedule, stated last month that the CLARITY Act will get a vote before the recess, but it appears the statement was hollow.
On prediction markets, Kalshi has a Senate vote before the recess at 26%. On Polymarket, the prospects of a vote are seen as a bit better at 31%. Even worse, only 28% foresee the bill having a vote before the end of the year.
While the negotiations on difficult issues such as yield and ethics seem to have been addressed, at this point it could be pure political theater delaying the bill, as Democrats do not want to give President Trump a win, and the ethics issue seems to be viewed as a way to undermine Republicans in advance of the midterms.
Senator Cynthia Lummis, a longtime crypto advocate, stated on X last week that it is now obvious the opposition is driven by politics and not what is good for the country:
“Dems finally saying the quiet part out loud: it’s not about protecting consumers from scams or ensuring businesses and jobs stay in America, it’s about hurting Trump by any means necessary — no matter who becomes collateral damage.”
Senator Lummis points a finger at crypto opponent Senator Elizabeth Warren, explaining the left-wing Democrat hates President Trump so much she would “rather have no rules of the road for the digital asset industry — leaving consumers vulnerable and law enforcement empty-handed — than take the win for consumers,” adding, “The facts speak for themselves. Don’t fall for Liz’s lies.”
While the Republicans are in the majority, the bill needs to get to 60 votes for approval. This means it needs bipartisan support, as Republicans only hold 53 seats.
The legislation aims to provide a regulatory approach updated to manage the new technology, which is vital for its development. It is also needed for consumer protection and anti-fraud and abuse concerns.
As it stands today, some anticipate the Securities and Exchange Commission and Commodity Futures Trading Commission will act on their own to create new rules if Congress fails to do its job, accomplishing what needs to be done via rulemaking and not legislation. Unfortunately, rulemaking is more easily reversed than law.
As was previously reported, one report indicates that digital asset innovators are already exiting the country to more welcoming jurisdictions. Beyond this hedging, the US reduces its ability to guide the rest of the world by leading instead of following others.
While all of this is a disappointing display of partisan politics where politicians do what is right for them and not the public, some believe even if the bill does not move forward this week, it can be resurrected in September for a floor vote. Unless there is a legislative miracle this week, it seems the supporters of the bill (Republicans) will be stymied by the opposition (Democrats).
Whether the bill reanimates in September or fades further into the background, the message from this week is already clear: when politics outweighs policy, American leadership in key technology is collateral damage that harms us all.