Senate Unlikely to Vote on CLARITY Act Before August Recess

Stablecoin rewards remain a point of contention. The draft restricts interest-like payments on passive stablecoin holdings but allows rewards tied to transactions or customer activity. Banking groups argue that broad reward programs could draw deposits away from regulated lenders. Crypto firms say tighter restrictions could limit competition and reduce the use of dollar-backed tokens. Republican senators have also raised concerns about the wording. Any floor process may require new amendments before Senate leaders can test support for the full bill.

The schedule becomes harder after the recess. Congress returns for about three weeks in September. Funding bills, defense legislation and election campaigning will compete for attention. Even if the Senate passes the measure, the House must approve the Senate version or resolve differences between the chambers.

The National Fraternal Order of Police endorsed the current version of the CLARITY Act on July 24. In a letter, the group said language linked to the Blockchain Regulatory Certainty Act addresses its earlier concerns and preserves law enforcement authority to investigate crypto-related crime. The endorsement removes one source of opposition. It does not settle the ethics, stablecoin, and vote-count disputes delaying Senate action.

Polymarket data show the probability of the CLARITY Act being signed into law in 2026 has dropped to 37%, down 28 percentage points from earlier levels. The decline reflects the timing uncertainty and the narrow path to passage before the midterm elections.