At some point, the advancement of the crypto sector’s top policy priority – the Digital Asset Market Clarity Act – becomes an insurmountable mathematical problem, with not enough time left in the US Senate’s work calendar to allow passage. But the bill has now been formally offered to the Senate calendar, and industry lobbyists are still looking for a last-minute victory.
There are about eight weeks of floor time available in the Senate before lawmakers disperse for summer recess and the political demands of the midterm congressional elections. And as the election season becomes more urgent, the desire for legislative cooperation may also suffer.
In the short window of work in the upper chamber of Congress, the Clarity Act would have to go through several procedural steps that can only begin once the market structure bill is finalized — a goal that still requires some major disputes to be resolved between the political parties and the White House.
The Clarity Act would establish a tailored regulatory regime for crypto in the United States — an idea that carries significant bipartisan support. But even if the bill were ready for action, a significant number of Senate business items compete for time and attention. And some of them haven’t gone very well.
A deadline looms this month to extend the Foreign Intelligence Surveillance Act (FISA), and getting a long-term deal on US spying powers, including the introduction of a ban on central bank digital currencies (CBDCs), has been a challenge. Senate leadership had warned that the CBDC component could kill the effort in that chamber, and an impasse had been set between the House and Senate that is still being resolved, but the latest version of the bill reportedly includes a temporary ban that expires in three years.
However, even more fireworks had erupted from the process to approve an immigration enforcement funding bill. The spending plan was derailed by an internal outcry from Republicans who opposed President Donald Trump’s $1.8 billion Department of Justice “anti-gun” fund to compensate allies. A court ordered the plan halted amid the dispute over its legality, and acting Attorney General Todd Blanche reportedly bowed to pressure Tuesday to assure lawmakers the idea is dead, expected to reopen the way for the immigration bill.
Must-pass bills
These two bills – FISA and immigration – must pass in order for aspects of the federal government to continue to operate and prioritize them over other work. Crypto lobbyists express quiet confidence that they will be resolved soon.
But once they’re approved, that doesn’t necessarily mean it’s smooth sailing for the crypto bill, which was formally sent to the Senate calendar this week.
Adding to some potential drama has been President Trump’s insistence that one of the legislative efforts — FISA, or a bill overhauling the U.S. housing code — be bogged down with his efforts to impose voter identification and proof of citizenship at the polls ahead of the midterm elections for Congress, which he has said would lead to his impeachment if Democrats win. Adding the controversial bill on top of another would greatly reduce the chances of its host bill passing, but Trump has previously threatened to halt congressional progress on other issues if lawmakers don’t get it done.
The housing bill he is looking at may be among the Transparency Act’s major competitors for floor time. The bipartisan legislation to encourage U.S. housing construction (while curbing certain institutional investors) has been torn back and forth by the House and Senate, but leaders in the two chambers are reportedly working on a version that will satisfy both. Even if all goes well, the Senate calendar is a zero-sum proposition at this stage, meaning that every hour devoted to anything that isn’t Clarity reduces the odds that the chamber will have enough bandwidth for the bill.
The Senate is also grappling with a debate on a war powers resolution aimed at halting US military action in Iran. And the coming days are also expected to see action on legislation known as the farm bill, which could get a hearing in the Senate Agriculture Committee, which is also supposed to be working on a final version of the Clarity Act, plus potential movement on the National Defense Authorization Act next year.
Summer plans
Although White House officials had expressed an Independence Day goal for the Clarity Act to clear Congress early next month, various lawmakers have suggested timing in late July or even early August — the last week before the start of the long congressional recess.
“Under my leadership, we will codify a FUTURE-PROOF Digital Asset Market structure that cannot be undone by Crypto Haters,” the president wrote in a recent post on his social media site. “The New Frontier of Finance is being built in America and ‘TRUMP’ will NEVER fail Crypto!”
His codifying promise may depend on what Trump is willing to allow in the Clarity Act, which involves an ethics provision aimed directly at him: banning government officials from personal interests in the crypto industry. A bill without such limits is widely seen as a dealbreaker for Senate Democrats, but crypto insiders suggest a runway period has been erected that may not force Trump to divest from his own interests.
The Clarity Act recently cleared the Senate Banking Committee in a narrow bipartisan vote that drew much fanfare from the industry. But cross-party approval of a parallel version in the Senate Agriculture Committee is now being sued on certain counts to bring that committee’s Democrats on board, including the potential requirement that the Commodity Futures Trading Commission — a leading regulator of crypto activity — get nominations from the White House to fill all four of its vacant commissioner positions (two Republicans and two Democrats).
Ongoing matches
Banking lobbyists are also expected to continue hammering away at the bill, which includes a section on stablecoin dividends that bankers see as a threat to their deposit base. And the decentralized finance (DeFi) interests are still trying to gain more legal protection for developers who don’t want to be punished for illegal use of their work.
So the bill isn’t done, and crypto advocates in Washington say it hasn’t jumped into June with a particularly quick start. Once the legislation is complete, including combining the versions from the banking and agriculture panels and adding an ethics provision, Senate leadership will have to set aside some floor time — potentially a full week (one of the precious eight remaining before the August recess).
If not before then, there’s still a little bit of time in September, and then comes the biggest wild card on the congressional calendar: the so-called “lame duck” session, in which members of this Congress will continue to work for about four weeks after the election effectively fires some lawmakers and retires others. Desperate deals on significant legislation have been made during these sessions, but the odds are long.
Senator Cynthia Lummis, who chairs the Digital Assets Subcommittee of the Senate Banking Panel, has sent a steady stream of encouragement to push the Clarity Act.
“We are closer to a functioning market structure for digital assets than we have ever been,” Lummis wrote Tuesday on social media X. “Now is not the time to back down.”
Read more: Clarity Act clears US Senate committee heading for final test in Congress
