The CLARITY Act is running out of time. The bill passed the House in July 2025 with strong bipartisan support, but has been stuck in Senate negotiations for months. Galaxy Research puts the odds of passage this year at roughly 50-50, and possibly lower.
What the CLARITY Act Would Do
The Digital Asset Market Clarity Act of 2025 is the most ambitious crypto market structure bill Congress has attempted. It draws clear lines between SEC and CFTC jurisdiction, sets up a test for when a digital asset is or is not a security, and brings crypto intermediaries under federal registration and anti-money-laundering rules for the first time. The House passed it 294-134, with 78 Democrats crossing the aisle. The Senate Banking Committee has been drafting its own version since, but has delayed a markup vote twice.
The Two Biggest Blockers to Senate Passage
The stablecoin yield fight has dominated coverage. Banks want to stop crypto exchanges from paying interest on stablecoins. A White House-brokered compromise would ban direct yield payments but allow activity-based rewards tied to payments or platform use. Coinbase CEO Brian Armstrong reversed his opposition on April 10 after Treasury Secretary Scott Bessent publicly called for a markup. The underlying commercial tension between banks and exchanges hasn’t gone anywhere.
The second issue is the Blockchain Regulatory Certainty Act, folded into the Senate version. It would establish that software developers who don’t custody user funds are not money transmitters under federal law. The crypto industry calls this a red line. Law enforcement groups, the National Sheriffs’ Association, and senators on the Judiciary Committee from both parties push back, arguing the provision would blind investigators tracking money laundering and terrorism financing. No one has yet found a way to satisfy those objections without gutting it.
Why Democrats Could Still Block the CLARITY Act
Democrats want to bar senior government officials and their families from holding crypto interests while in office. The demand is aimed at the Trump family’s involvement in various crypto projects. It didn’t make it into the Senate’s base negotiating text, but Democratic senators have made clear they will push for it during markup or on the floor. The bill needs 60 votes to pass the Senate. Democratic support isn’t optional.
Two SEC-related issues also remain unresolved. One involves a provision critics say would box in the SEC’s ability to use exemptive relief tools for digital asset markets. The other is more political: the SEC currently has only three commissioners, all Republican appointees, and filling the two empty seats with Democrats has quietly become leverage in broader floor negotiations.
The CLARITY Act’s Timeline Problem
Even with all five issues resolved, getting this bill signed is a five-step process. Senate Banking Committee markup. Full Senate vote with 60 votes. Reconcile with the Agriculture Committee’s digital commodity bill. Reconcile with the House-passed version. Presidential signature. The calendar is already crowded with Iran military authorization debates, unresolved DHS funding, and a backlog of nominations.
Senator Thom Tillis called this week for pushing the Banking Committee markup to May. Galaxy Research says if it slips past mid-May, the odds of passing anything this year fall sharply. Senator Bernie Moreno has said the bill must reach the full Senate floor by May before the midterm campaign calendar swallows it.
Why This Window for US Crypto Regulation May Not Come Back
More than 100 organizations, including Coinbase, Ripple, Kraken, Circle, Andreessen Horowitz, Uniswap Labs, and Chainalysis, sent a joint letter to the Senate Banking Committee this week urging it to schedule a markup now. They argued that the EU and other jurisdictions have already implemented comprehensive frameworks, and that the U.S. is falling behind.
Senator Cynthia Lummis has said failure this year could push market structure legislation to 2030 or beyond. The coalition behind this bill was built on specific conditions: a pro-crypto White House, a Republican Banking Committee chair, and an industry that spent heavily in 2024 to elect crypto-friendly candidates. Midterms in November could change the committee math overnight. A Senate Banking Committee led by Elizabeth Warren or Sherrod Brown would look nothing like today’s. This window took years to open.
