Senate Crypto Bill at Risk as Recess Clock Ticks

The Digital Asset Market Clarity Act is approaching a make-or-break moment. Senators Thom Tillis and Ruben Gallego are racing to finalize a bipartisan compromise on ethics provisions before the Senate leaves Washington for the August recess. Lawmakers have days left.

Two people familiar with the talks said the senators completed an initial revision of the ethics language last week. The changes aim to restrict senior government officials from holding direct financial ties to cryptocurrency projects. The goal is to address concerns around President Donald Trump's crypto business interests while drawing more Democratic support.

Trump accepted a narrower version of the ethics proposal. Several Democratic lawmakers told their colleagues the current language would require little change to his holdings and lacks meaningful enforcement. The White House has not signed off on the revised text. Patrick Witt, the administration's crypto adviser, has said the concerns about stablecoin rewards and DeFi rules were already resolved.

Time is the biggest obstacle. Senate Majority Leader John Thune acknowledged the chamber will likely vote on the Clarity Act. He said progress depends on whether enough Democrats agree to advance the bill. Supporters are pushing Thune to begin the cloture process, a procedural step requiring multiple floor votes before final passage. If cloture fails before the recess, the bill's momentum could evaporate.

Negotiators are still working through several unresolved issues. The American Bankers Association urged lawmakers to tighten language preventing stablecoin issuers from offering rewards that resemble interest-bearing bank deposits. DeFi developers face potential anti-money laundering rules that remain in dispute. Witt said those concerns were addressed in earlier drafts, some Democratic aides disagreed.

Coinbase CEO Brian Armstrong described the legislation as being "at the one-yard line," reflecting optimism that long-awaited regulatory clarity is within reach. Industry lobbyists have been pressing both parties for a deal. A delay beyond September would increase the likelihood that the legislation is postponed until a new Congress, especially if the political balance shifts after the November elections.

The Senate has not yet set a date for the cloture vote. The clock is the bill's real opponent. For more on the broader stakes, see CLARITY Act delay risks US crypto lead, Haridopolos warns.