Senate Clarity Act faces uncertain September vote

The Senate postponed consideration of the “Clarity Act,” a bill that would establish a federal regulatory framework for cryptocurrency, until the chamber reconvenes for a brief three-week session in September. Lawmakers have not yet resolved an ethics provision that would bar elected officials and their spouses from issuing or sponsoring digital assets. The White House previously approved a version of that provision, but Democratic senators have pushed for stronger enforcement mechanisms, creating the current impasse.

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The Clarity Act was first introduced as a bipartisan effort to give the crypto industry regulatory certainty while addressing concerns from the banking sector. In May, senators added restrictions aimed at preventing a stable-coin loophole that could draw deposits away from community banks. However, Republican senators—including Josh Hawley, Mike Rounds and Jerry Moran—have argued that the bill still threatens local lending. At the same time, Senate Democrats, led by the chair of the Banking digital assets subcommittee, Sen. Ruben Gallego (D-Ariz.), have insisted on an ethics clause that would prevent officials from profiting from crypto holdings, a demand that has met resistance from the White House and President Trump.

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Majority Leader John Thune (R-S.D.) announced that the bill will be “queued up first thing” when the Senate returns, noting Democratic insistence on postponing a vote. Sen. Thom Tillis (R-N.C.) warned that the likelihood of passage “probably drops in half” after the delay. Sen. Josh Hawley (R-Mo.) expressed ongoing concerns about the bill’s impact on community banks, emphasizing the need to protect farmers and ranchers who rely on local institutions. Sen. Jerry Moran (R-Kan.) echoed those worries, describing the stable-coin provisions as a threat to local lending.

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Democratic leaders have framed the ethics provision as essential to avoid conflicts of interest, especially given President Trump’s personal crypto holdings. They argue that without robust enforcement—potentially by state attorneys general—the bill would fail to address ethical risks. Republican critics, meanwhile, contend that the bill’s stable-coin rules could trigger a “massive flight” of deposits from community banks, undermining credit availability for rural economies.

The Hill

• “I do think the odds drop in September,” — Ian Katz, managing partner at Capital Alpha

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• “The Dems are insistent on no Clarity vote… I worked with sponsors of the bill,” — Majority Leader John Thune

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• “President Trump is really the ultimate the decider on this,” — Ian Katz, managing partner at Capital Alpha

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• “I’m open to being persuaded on this,” — Sen. Josh Hawley

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• “I see that myself as a threat to local lending in a place like Kansas where farmers and ranchers depend upon a local financial institution who has trust and faith in them,” — Jerry Moran

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