Senate CLARITY Act draft expected next week as 60-vote hurdle looms

Senate Banking and Agriculture Committee staff are finalizing a merged Digital Asset Market CLARITY Act draft that could drop as early as July 13, combining roughly 70 pages of new language from both panels, according to people briefed on the negotiations.

"This is likely our last chance to get real legislation for digital assets on the books before 2030," Senator Cynthia Lummis, the Wyoming Republican and lead sponsor, said on X on July 8. "If we fail to pass the Clarity Act, we are ensuring another country will write the rules."

The unified text adds heavier consumer-protection language than either committee's standalone version, a deliberate shift to attract Democratic support. The bill needs 60 votes to clear a Senate filibuster, meaning at least seven Democrats must back it. Two Democrats who supported the Banking Committee version in May have made their final votes conditional on an ethics provision barring senior government officials — including the president — from having financial ties to the crypto sector. That language remains unresolved in the merged draft, and the White House has not been actively engaged in recent negotiations, multiple sources told CoinDesk.

Senate Majority Leader John Thune has signaled willingness to bring the bill to the floor as soon as the week of July 20, leaving roughly three weeks before the August recess. Miss that window, and the bill's momentum stalls until at least 2027, with the midterm elections reshaping the political landscape.

The merged text resolves one structural hurdle: the CBDC ban. A provision prohibiting the Federal Reserve from issuing a central bank digital currency for at least four years took effect July 10 after being included in a housing bill signed by President Trump, removing a potential poison pill from the CLARITY Act negotiations.

Ethics provision remains the key fault line

The ethics fight has become the central obstacle to bipartisan support. Democrats want language that would prohibit the president and senior officials from maintaining business relationships with crypto firms while in office. A proposal to allow state attorneys general to sue for ethics violations has been discussed but not finalized.

Senator Elizabeth Warren has criticized the bill as "a ticket to sanctions evasion," a charge Lummis rebutted by pointing to 16 anti-illicit-finance safeguards in the text, including Section 303, which enables new crypto sanctions on Iran, and Section 305, which lets exchanges intercept funds bound for North Korea.

On a more positive note for the bill's proponents, Senator Ron Wyden of Oregon wrote to Senate leadership on July 8 asking them to preserve the Blockchain Regulatory Certainty Act provisions, which would ensure crypto developers who do not hold customer funds are not classified as money transmitters.

Stablecoin yield fight adds another layer

The stablecoin debate has injected additional complexity. JPMorgan Chase CEO Jamie Dimon has warned that yield-bearing stablecoins offering bank-like returns without comparable capital requirements could create a "shadow banking" crisis. Banking trade groups are lobbying to ban all yield-generating stablecoins, while Coinbase and Circle — which earn revenue from interest on USDC reserves — are pushing to preserve activity-based rewards.

A compromise brokered in May by Senators Thom Tillis and Angela Alsobrooks would ban passive stablecoin rewards but permit activity-based rewards tied to transactions or platform utility. That language is expected to carry into the merged draft.

What happens next

The House Financial Services Committee's digital assets subcommittee will hold a hearing on the CLARITY Act in New York on July 17. If the Senate bill clears the floor, it must still pass the House, where intraparty Republican divisions have stalled previous crypto legislation.

Industry groups including Stand With Crypto are preparing to score the vote, and crypto political action committees have hundreds of millions of dollars on hand to deploy ahead of the November midterms.

This article is for informational purposes only and does not constitute investment advice.