The Senate pushed the Clarity Act to September, leaving unresolved whether stablecoin issuers can offer yield-like returns. Galaxy Research puts passage odds at 30%.
The United States Senate has pushed the crypto Clarity Act to the back of its schedule. The delay stalls an agreement between the crypto industry and the banking lobby over whether stablecoin issuers can offer yield-like returns to investors.
The bill would prevent stablecoin providers from offering interest-like returns for simply holding stablecoins. It would still allow rewards for activities that are not equivalent to deposit interest, according to Galaxy Research. Banks spent months negotiating those terms to keep stablecoin issuers from competing for deposits. With the vote delayed, the arrangement is not yet law.
Senate Majority Leader John Thune prioritized other business. He started the process to approve several nominations on Monday. He will tackle a package of sanctions against Russia at the Tuesday night Senate session, which begins the clock on cloture. Senate rules allow only one contested bill on the floor at a time. The Clarity Act cannot move until those bills either pass or hit the deadline.
The Russia sanctions measure targets Moscow's leadership and imposes tariffs on trade partners. It is named after the late senator Lindsey Graham, who supported the initiative. Graham's funeral will take place this week, monopolizing the Senate on Tuesday and Wednesday both in Washington and South Carolina.
The Clarity Act is unlikely to reach a vote before next week, the final days before the Senate's summer break starts on August 8. The next real window would come in September.
Negotiators are still grappling with an ethics provision. The rule, backed by Democrats, would prohibit senior officials including President Donald Trump from holding crypto ties. Trump indicated last week he would comply with a new rule. Democrats rejected the proposal, saying it would leave his crypto holdings safe, Axios reported.
Progressive groups including Indivisible and Demand Progress sent a letter to every Democratic senator criticizing Senator Kirsten Gillibrand, who is trying to negotiate a compromise. The super PAC Fairshake claims it has $125 million at its disposal, Axios reported.
Republican senators Bernie Moreno, Cynthia Lummis, and Thom Tillis have brought negotiations to the White House. The bill still needs 60 votes. Only Democratic representatives Ruben Gallego and Angela Alsobrooks have approved the original Banking Committee proposal.
The legislation is extensive. The draft released recently spans 616 pages, 104 sections, and four divisions, Galaxy Research said. It combines bills from the Banking and Agriculture committees, presents ethics limitations, a law enforcement title, amendments to last year's GENIUS Act, and other negotiated provisions.
Galaxy Research head Alex Thorn said the odds of passage have fallen. "As the Senate calendar tightens and a lack of progress in negotiations makes passage less likely than several weeks ago," he wrote. He also said a 60-vote bill that still needs a merged Banking-Agriculture text, a motion to proceed, floor debate, an amendment process, and then House action means the runway is "quickly declining into just a matter of weeks." Galaxy put the bill's approval odds at 30%.
Circle CEO Jeremy Allaire welcomed the Senate's passage of the GENIUS Act. He said the earlier bill "establishes clear rules that will help modernize the financial system while protecting consumers and supporting innovation." Allaire has argued that regulatory clarity would accelerate institutional adoption rather than merely benefit crypto firms.
The Bank Policy Institute said stablecoin issuers performing bank-like functions should face comparable regulatory requirements. The Senate's delay leaves unresolved whether Congress will eventually require stablecoin issuers offering yield-like products to compete under rules similar to those governing banks.
New York Attorney General Letitia James opposes the legislation. In her testimony before the Senate Permanent Subcommittee on Investigations, she said the bill would transfer oversight from states to the Commodity Futures Trading Commission, limiting states' ability to regulate scams. Her office said it has received three times as many complaints about scams in the past three years.
If the Clarity Act fails this session, the industry still has the ongoing implementation of the GENIUS Act and rulemaking processes at the SEC and CFTC. Even if the Senate passes the bill, the House must act, and President Trump has said he will not sign bills until Congress agrees on new voter-identification requirements.
Senator Elizabeth Warren has criticized the current version of the bill. She has not said whether she would support any compromise.
For more on the broader regulatory fight, see Goldman CEO backs CLARITY Act as banks fight stablecoin rewards.
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