Clarity Act Hits Snooze Button: Senate Hit snooze button: Senate Punches September Ticket on Crypto Bill 😴

Senate Majority Leader John Thune (R-S.D.) confirmed Thursday that the CLARITY Act will not receive a floor vote before the August recess, punting the crypto market structure bill to September and shrinking the legislative window ahead of November's elections. "The Dems are insistent on no Clarity vote," Thune said in remarks posted by his press office, adding that he had worked with the bill's sponsors and that Senator Cynthia Lummis (R-WY) "was great, and we're getting that queued up first thing when we come back." The Senate adjourns Friday and is expected to reconvene September 14, leaving only a brief pre-statement stretch before midterm campaigning consumes the chamber.

The procedural arithmetic has not improved since the bill cleared the Senate Banking Committee 15-9 in May, when only two Democrats, Ruben Gallego (D-AZ) and Angela Alsobrooks (D-MD), crossed over. Roughly six Democratic votes are needed on the floor alongside the 53-member Republican caucus, and a source familiar with the matter told The Block that Senate Democrats were reluctant to vote ahead of the midterms given the crypto industry's growing political influence. Republicans have also wavered; a cloture filing on the bill remained absent even as Thune filed cloture on the Protect College Sports Act of 2026, the nomination of Todd Blanche to be U.S. Attorney General, the nomination of Erica Schwartz to head the Centers for Disease Control and Prevention, and Calendar No. 320, H.R. 6500, the legislative vehicle for a Continuing Resolution, along with the Collins substitute amendment #6732. Crypto In America host Eleanor Terrett said procedural issues tied to the Continuing Resolution, which the Senate passed 89-4 to avert a government shutdown, contributed to Thune's decision not to file cloture on CLARITY.

Unresolved issues center on stablecoin rewards, the bill's anti–illicit finance provisions, and ethics language covering President Donald Trump's crypto holdings. An addendum negotiated by Senators Thom Tillis (R-NC) and Gallego, still being worked out with the White House, would require the president to divest from crypto-related businesses and would let him defer federal capital gains tax on those holdings, potentially for years, a deferral that could leave gains untaxed entirely if replacement investments are held until death. Trump reported $1.4 billion in crypto and meme coin earnings for 2025 and holds a 38% stake in World Liberty Financial through an affiliated company; without deferral he would face a 20% rate. Commerce Secretary Howard Lutnick and Treasury Secretary Scott Bessent have both used the same provision on their own divestments. The addendum would also let state attorneys general sue to enforce the ethics measures where the Justice Department declines to. Senator Thom Tillis told reporters, "We've got people working with the White House right now… they're going through some of the lines right now."

Industry voices framed the delay as an opening for foreign hubs. First Digital founder and CEO Vincent Chok, whose company issues the FDUSD stablecoin, said the postponement leaves institutions without clear rules on market structure, custody and oversight, and that "For Asia, this delay gives regional financial hubs like Hong Kong and Singapore additional time to demonstrate that clear regulation can coexist with innovation." Maylea Ma, deputy general counsel at decentralized exchange aggregator 1inch, warned that if Congress fails to enact the legislation, the industry could face a return to "regulation by enforcement," contrasting that uncertainty with the European Union, where the Markets in Crypto-Assets Regulation (MiCA) is already in force. Wellington-Altus chief market strategist James E. Thorne called the postponement a "fold" by Thune and a victory for Senator Elizabeth Warren and the regulatory status quo, writing on X, "Regulation should have been passed years ago. Instead, Washington chose to live in ambiguity."

Markets reacted to the lost catalyst. Ripple's $XRP slipped roughly 2.2% over 24 hours to trade near $1.03, leading losses among major altcoins while $BTC and broader market leaders remained largely flat, as spot demand cooled in the absence of an immediate legislative tailwind.