CLARITY Act's July 4 Fireworks Look More Like a Damp Sparkler 🎆

The White House is pushing to get the CLARITY Act signed into law by July 4, but key lawmakers, industry voices and prediction markets are increasingly betting on a post-holiday timeline, with many now pointing to the August recess as the more realistic target. White House Digital Asset executive director Patrick Witt reiterated in a recent interview that the administration remains "still optimistic" about hitting the Independence Day window, telling journalist Eleanor Terrett, "We're making progress on all fronts everyday." Terrett, host of the Crypto in America podcast and newsletter, has called the July 4 goal "logistically impossible," citing the procedural steps still required, including merging the Senate Banking and Agriculture committee texts, resolving an ethics deal, and securing 60 votes in the Senate. Senator Bill Hagerty said he hopes Congress can finish the bill before the July 4 recess, but added, "This will be something more a matter of focus after the 4th of July recess period, but I certainly hope to see it done before." Senator Cynthia Lummis has indicated a Senate floor vote is more likely before the August recess, and Senate Banking Committee Chairman Tim Scott framed the legislation as a generational opportunity, predicting approval could help grow the crypto market from $3 trillion to $30 trillion in valuation.

Industry pressure on the Senate intensified this week as more than 200 crypto organizations and companies — including Stand With Crypto, the Blockchain Association, the Crypto Council for Innovation and The Digital Chamber — sent a joint letter dated June 7 to Senate leaders John Thune and Chuck Schumer urging them to schedule the bill for full Senate consideration. A separate coalition of more than 60 firms, including Hyperliquid, Solana, MultiCoin Capital and the DeFi Education Fund, pressed lawmakers on June 9 to preserve the bill's developer protections. "The Senate should now build on that momentum and give members the opportunity to advance durable market structure legislation," the industry letter stated, adding, "The question before Congress is whether that future will be built in the United States — under U.S. law, U.S. oversight, and American values — or continue moving to offshore jurisdictions." Lummis has championed the bill publicly, writing on social media, "The CLARITY Act passed committee. The floor is next." She also disclosed that the bill would direct $150 million in funding to law enforcement to track down "scammers and bad actors in the digital asset space."

Two major sticking points remain unresolved. On Tuesday, a closed-door bipartisan meeting attended by Senators Kirsten Gillibrand, Ruben Gallego, Bernie Moreno and Lummis, along with Witt, saw Republicans and the White House walk back a provision that would have allowed state attorneys general to sue the Department of Justice over failures to enforce ethics rules tied to President Donald Trump's crypto business interests, which critics estimate have generated roughly $2.3 billion to $3 billion in profits over the past year. The White House and GOP offered to limit enforcement to the Attorney General and floated impeachment as a remedy, which Democrats rejected. The following day, the White House Crypto Council hosted roughly 20 people at the Eisenhower Executive Office Building, including representatives from the National Sheriffs' Association, the Fraternal Order of Police, the National District Attorneys Association, the National Association of Police Organizations, the International Association of Chiefs of Police and the National Association of Assistant U.S. Attorneys, along with officials from the DOJ, Treasury and FinCEN, House Majority Whip Tom Emmer, and White House AI and crypto czar David Sacks. The talks centered on Section 604, the Blockchain Regulatory Certainty Act, with law enforcement groups warning that certain developer protections could make it harder to pursue bad actors onchain. Solana Institute President Kristin Smith pushed back, writing, "The BRCA draws a bright line: if you write open-source software, run a node, or validate transactions — and never take custody or control of anyone's money — you are not a money transmitter," and arguing the provision "must stay in the bill, fully and intact." Senator Kirsten Gillibrand has not publicly commented on the latest talks; Senators Mark Warner and Catherine Cortez Masto have tied their support to law enforcement's sign-off.

The bill's path is also drawing opposition from parts of Wall Street. JPMorgan CEO Jamie Dimon said last month that banks would "fight" parts of the legislation over stablecoin regulation, arguing that crypto firms offering payment and deposit-like services should face banking-style oversight requirements, including liquidity, AML, capital and consumer protection obligations. Tim Scott countered that traditional financial institutions are already moving into digital assets, stating, "The fact of the matter is that even JP Morgan is now getting involved in stable coins," and adding, "digital assets is a part of the future of finance." Ripple CEO Brad Garlinghouse has also pushed back against Dimon's criticism. Prediction markets reflect the uncertainty: Polymarket is pricing the bill's 2026 passage odds near 48% to 51%, down from 74% a month ago, while Kalshi is pricing 46% odds for passage by year-end and 30% odds for passage before August, leaving traders roughly 50/50 on the legislation clearing Congress this year.