Clarity Act Stalls Over Trump Family Crypto Ethics Fight

Timing adds its own pressure. Senate Majority Leader John Thune does not expect the Clarity Act to pass before the August recess. Negotiators still need agreement on consumer protection and illicit finance measures. Without changes, Democrats may withhold the votes Republicans need for swift passage.

Ethics is not the only obstacle. Banks want tighter limits on stablecoin rewards, fearing deposits could migrate into yield-bearing crypto accounts. That shift could reduce lending capacity and pressure banking profits. Tillis has discussed circuit-breaker powers for the Federal Deposit Insurance Corporation or other regulators if deposits fall sharply, Bloomberg reported.

Senator Cynthia Lummis, one of the bill’s strongest Republican supporters, opposes that approach. The disagreement shows how the Trump crypto business controversy intersects with fights over market structure and banking competition.

Critics have challenged a provision ending the ethics rules on January 20, 2029. That date matches the inauguration of Trump’s successor. Opponents say the sunset could limit accountability after his term. Republicans argue the proposal creates restrictions beyond those accepted by previous presidents.

Political pressure may shape the final deal. Fairshake and two affiliated super PACs have raised $164 million for the midterm elections. Federal filings show they have spent $66.6 million. Crypto-friendly Democrats risk industry opposition if talks collapse, while progressives could attack any compromise.

Senator Chris Murphy has urged Democrats to frame crypto corruption as a campaign issue. Other Democrats worry that rejecting the Clarity Act could direct industry spending against Senate candidates.

Prediction markets reflect the uncertainty. Polymarket traders placed the Clarity Act’s passage odds near one in three. That level is roughly half the probability recorded after a Senate committee backed an earlier version on May 14. The Trump crypto business dispute now sits at the center of falling expectations.