Written by: Forbes
Compiled by: AididiaoJP, Foresight News
Bipartisan lawmakers in the U.S. Congress are preparing to advance market structure legislation for cryptocurrencies, namely the highly anticipated Clarity bill. As with all milestone legislation before it, its fate hinges on whether compromises can be reached on contentious issues.
For the Clarity bill, the journey has been particularly bumpy.
In January of this year, Coinbase CEO Brian Armstrong suddenly intervened, overturning the bipartisan agreement and vote already reached by the Senate Banking Committee. The bill has since failed to be effectively revived.
Racing Against the Congressional Clock
Four more months passed before the committee could schedule the bill on the congressional calendar. This green light came thanks to a bipartisan compromise on the "yield" issue reached by Maryland Democratic Senator Angela Alsobrooks and North Carolina Republican Senator Thom Tillis.
While this was positive progress, ethics provisions had by then become a major non-negotiable condition for Democrats. Ultimately, when the committee moved the bill forward in May, it received support from only two Democratic senators—Alsobrooks and Arizona Senator Ruben Gallego. Both explicitly stated that their votes in the next step would depend on the handling of ethics issues.
Senator Alsobrooks clearly stated her position: "I have been working hard to make this bill better. Let me be very clear: My vote today is to continue this work in good faith. It does not mean I will support the passage of the Clarity bill on the Senate floor. We still have work to do."
Senator Gallego expressed a similar view: "My vote today is to allow us to continue these efforts. But I want to be clear: A vote here is no guarantee of my support on the floor. We have many outstanding issues to resolve. Among the most difficult and critical is reaching an agreement on ethics guardrails for elected officials."
As no agreement was reached on ethics issues, the Clarity bill in the Senate Agriculture Committee ultimately passed on a party-line vote, with no Democratic support.
Is Compromise on Crypto Policy Possible?
Entering the hot month of July, Senate Republicans are rushing to schedule a floor vote. At this point, demands for ethics provisions are no longer limited to Democrats. Disputes over yield have also brought more Republicans to the side of big banks, while law enforcement agencies have voiced strong opposition to the developer protection provisions.
Illicit finance and consumer risk remain core concerns. Statements last week from two senior senators were notable.
Wyoming Republican Senator Cynthia Lummis posted on X, highlighting consumer protection clauses: "We drafted the Clarity bill to give law enforcement more tools, not fewer. The bill writes into law real-time interdiction between exchanges and investigators, allowing illegal funds to be frozen in a matter of hours instead of years, and preserves all the money laundering charges investigators already rely on."
Virginia Democratic Senator Mark Warner, during a recent Senate Finance Committee nomination hearing, expressed both optimism and concern when speaking about bad actors: "I want to get this done. I’m tired of being in 'crypto hell.' But we have to do it in a way that doesn’t make things worse. I want America to lead in digital assets. If we mess this up, the consequences are equally great."
What is the Path Forward in Congress?
Yes, there is bipartisan consensus on the need for market structure legislation. However, compromise, a hallmark of the Washington legislative system, is facing significant resistance.
Despite this, momentum is building. On July 17th, the U.S. House Financial Services Committee held a field hearing in New York City. Senator Lummis and Ohio Senator Bernie Moreno met with White House officials to discuss the bill and explore potential ethics language.
There is high anticipation for a reconciled text between the Senate Banking and Agriculture Committee versions, which could be released later this week. However, some lawmakers question whether it can garner sufficient bipartisan support. Senator Gallego said in a media interview last week: "They are taking their version of the ethics provision to the president, not what we Democrats agreed to... At the end of the day, we don’t have strong ethics provisions. I don’t care what the president says. There are no Democratic votes."
Congress Holds the Legislative Authority
What can advance legislation is Congress, the legislative branch. Can congressional Republicans secure from the executive branch a strong ethics agreement that Democrats are willing to co-sign? The answer seems to vary. Industry grassroots enthusiasm is high, news reports are filled with speculation, and C-suite executives are generally optimistic.
But beyond this noise, does the crypto community have a short-term collective goal in the congressional process?
- A symbolic floor action in the Senate before the August recess, even if the votes aren't there?
- Passage in both chambers, eventually becoming law in 2026?
- A framework for rigorous debate leading to a compromise including ethics and BRCA (Bank-Related Clause?) provisions, to supplement the previously reached yield agreement?
Most likely, it's all of the above. Substantive work to advance Clarity has never stopped since the bipartisan passage of the Financial Innovation and Technology for the 21st Century Act (FIT21).
At this stage, setting clear goals helps define a timeline and provides guidance for bipartisan strategy on Capitol Hill should the July push stall.
Although the obstacle course for the Clarity bill is rough, the long and frustrating tradition of counting votes and winning over bipartisan support one legislator at a time is precisely the tactic the crypto industry has time to employ and refine.
