CLARITY Act Vote Delayed to September as Senate Rejects Pre-Recess Deal

Democratic opposition has centered on ethics provisions involving digital asset holdings by federal officials. President Donald Trump's family-linked crypto activities have become a central issue. A bipartisan proposal would require Trump and other officials to divest holdings when a stake exceeds $1 million and represents at least 10% of a company's value. Seven Senate Democrats rejected an earlier draft in July, increasing pressure for further changes.

Senator Josh Hawley has said he could oppose the measure unless senators change provisions that could hurt community banks. Banking groups have separately pushed for stricter limits on interest-like payments linked to stablecoins. Those concerns add another challenge for leaders trying to assemble 60 votes.

The CLARITY Act would create a federal market structure for digital assets, dividing oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Supporters say clearer rules are needed for crypto trading, registration, and regulatory authority. If the Senate approves a version that differs from the House bill, the House would need to consider the revised text before the legislation can move to the president.

Prediction market traders have lowered expectations during the delay. Polymarket contracts on whether the CLARITY Act will become law in 2026 traded near 14%, down from 27% in late July. The contracts had attracted about $5.16 million in volume, showing how sharply market expectations changed as the Senate postponed action.