Author: Forbes
Compiled by: AididiaoJP, Foresight News
Lawmakers from both parties in the U.S. Congress are preparing to advance cryptocurrency market structure legislation, the highly anticipated Clarity Act. As with all landmark bills before it, the ability to reach compromises on contentious issues will determine the fate of this legislation.
The journey for the Clarity Act has been particularly bumpy.
In January, Coinbase CEO Brian Armstrong suddenly intervened, overturning a bipartisan agreement and vote already reached by the Senate Banking Committee. Since then, the bill has struggled to regain momentum.
Racing Against the Congressional Clock
Four more months passed before the committee could schedule the bill for congressional action. This green light was made possible by a bipartisan compromise on the "yield" issue brokered by Maryland Democratic Senator Angela Alsobrooks and North Carolina Republican Senator Thom Tillis.
While a positive development, ethics provisions had by then become a major non-negotiable condition for Democrats. Ultimately, when the committee advanced the bill in May, it received support from only two Democratic senators—Alsobrooks and Arizona Senator Ruben Gallego. Both made it clear that their votes for the next step depended on the handling of ethics issues.
Senator Alsobrooks stated her position unequivocally: "I have worked hard to make this bill better. Let me be very clear: My vote today is to continue advancing the work in good faith. This does not mean I will support the Clarity Act's passage 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: This vote here does not guarantee my support on the floor. We have many unresolved issues to address. Among the hardest and most critical is reaching an agreement on ethics guardrails for elected officials."
As no agreement on ethics was reached, the Clarity Act in the Senate Agriculture Committee ultimately passed on a party-line vote, without any Democratic support.
Is Compromise on Crypto Policy Possible?
Entering the sweltering heat of July, Senate Republicans are rushing to schedule a floor vote. Now, the demand for ethics provisions is not limited to Democrats. Controversy over yields has also pushed more Republicans to side with big banks, while law enforcement agencies have voiced strong opposition to developer protection clauses.
Illicit finance and consumer risk remain core concerns, highlighted by statements from two senior senators last week.
Wyoming Republican Senator Cynthia Lummis posted on X, emphasizing consumer protection provisions: "We drafted the Clarity Act to give law enforcement more tools, not fewer. The bill codifies real-time interception between exchanges and investigators, allows for freezing illegal funds in hours, not years, and preserves all the money laundering charges investigators already rely on."
Virginia Democratic Senator Mark Warner, at a recent Senate Finance Committee nomination hearing, expressed both optimism and concern regarding 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 the U.S. to lead in digital assets. If we mess this up, the consequences are equally significant."
What is the Path Forward in Congress?
Indeed, there is bipartisan consensus on the need for market structure legislation. But compromise, a hallmark of Washington's legislative system, is facing significant resistance.
Despite this, momentum is building. On July 17, the U.S. House Financial Services Committee held a field hearing in New York City. Senators Lummis and Ohio Senator Bernie Moreno met with White House officials to discuss the bill and explore possible ethics language.
There is high anticipation for a reconciled text between the Senate Banking and Agriculture Committee versions, with a potential release later this week. However, some lawmakers question whether it can garner sufficient bipartisan support. Senator Gallego stated in a media interview last week: "They are taking their own version of an ethics provision to the President, not what we Democrats have agreed to... At the end of the day, we don't have a strong ethics provision. I don't care what the President says. No Democrats' votes."
Congress Holds Legislative Authority
It is the legislative branch, Congress, that can advance legislation. Can Congressional Republicans secure from the administration a strong ethics deal that Democrats are willing to co-sign? The answer seems to vary. Grassroots industry enthusiasm is high, news reports are filled with speculation, and C-suite executives are generally optimistic.
But beyond the noise, does the crypto community have a short-term collective goal in the Congressional process?
- A symbolic Senate floor action before the August recess, even if the votes aren't there?
- Passage through both chambers, ultimately being signed into law in 2026?
- A framework, reached through rigorous debate, that includes ethics and BRCA (banking-related?) compromises to supplement the previously reached yield agreement?
Most likely, it's all of the above. Since the bipartisan passage of the Financial Innovation and Technology for the 21st Century Act (FIT21), substantive work to advance Clarity has never stopped.
At this stage, setting clear goals helps define timelines and guides bipartisan strategies on Capitol Hill should the July push stall.
While the obstacle course for the Clarity Act is rugged, the long, frustrating tradition of counting votes and winning bipartisan support one lawmaker at a time is precisely the tactic the crypto industry now has the time to employ and refine.
