U.S banking trade group, the Bank Policy Institute (BPI), has opposed the newly released CLARITY Act draft, flagging gaps on key issues.
In a statement on Thursday, the 23rd of July, the BPI said the bill still has “shortcomings” on stablecoin yield and illicit finance provisions that should be “strengthened.”
The banking industry has been opposed to the earlier stablecoin yield compromise that only allowed incentives based on account activity, not idle balances.
This passive yield ban sought to address banks’ capital flight concerns. The compromise is captured in the new draft (Section 404).
Unfortunately, the banking industry sought a total ban on any form of stablecoin yield or incentive.
Unsurprisingly, the banking sector has lobbied some lawmakers, including Sen. John Curtis (R-Utah) and Sen. John Cornyn (R-Texas), who now share the banks’ concerns over the crypto bill.
Will the CLARITY Act win the needed 60 votes?
This is bad news for Republicans and the crypto industry.
Before the death of Sen. Lindsey Graham this month, the Republicans had 53 members. Besides, another member, Kentucky’s Senator Mitch McConnell, has been sick for over a month, bringing their headcount to 51.
If Sen. Curtis and Cornyn withhold support for the bill, the Republican support will drop to 49.
In other words, they’ll need 11 Senate Democrats to support the bill to hit the 60-vote threshold. Unfortunately, some pro-crypto Democrats like Sen. Angela Alsobrooks and Ruben Gallego have opposed the bill due to inadequate provisions on ethics and illicit finance, among other issues.
This complicates the 60-vote target if a deal isn’t reached to win over all the key holdouts. On top of this, the timing and Majority Leader’s outlook don’t help the bill’s progress.
Only two weeks remain before the Senate breaks for the August recess. Most analysts had warned that if the bill is not passed by August, it will be as good as dead.
For his part, the U.S. Senate Majority Leader John Thune warned that the bill may fail to pass before the August recess.
I don’t think we’ll be able to get them done. I would like to get at least Clarity started. We’ll see where the votes are.
In response, White House Chief Crypto Advisor Patrick Witt urged Thune to schedule the vote and stop waiting for Democrats.
You’d be waiting forever (for Democrats). Nobody thought that we could actually produce an ethics provision that had real teeth, and that included the President.
For Witt, the new ethics provision addresses Democrats’ concerns.
Market expectations for the bill’s passage in 2026 briefly dropped to 32% on Friday. Whether the passage odds will improve in the next two weeks remains uncertain.
Final Summary
- Tentative Senate backing for the crypto bill has dropped below 50.
- Majority Leader John Thune doubted the CLARITY Act’s chance of passage before the August recess
