The cryptocurrency industry and investors are waiting for the completion of the US CLARITY Act, which has been delayed due to partisan politics and industry concerns.
The bill would rewrite the rules of the road for the crypto industry, from which the agency oversees it, to regulations governing decentralized finance (DeFi).
Currently, lawmakers in the U.S. Senate are ironing out details that raise significant sticking points. Democrats want a bipartisan bill that includes ethics and bailout provisions, which Republicans have vehemently rejected.
The crypto industry itself has expressed opposition to some of the regulations. Namely, Coinbase, the largest cryptocurrency exchange in the US, does not want a bill that would prevent it from offering profits from stablecoins. The U.S. banking lobby opposes such yields, saying they threaten deposits and the stability of the financial system.
The act has gone through several iterations. Here’s how far he’s come:
May 2025: CLARITY comes to Washington
First, House Financial Services Committee Chairman French Hill introduced CLARITY Act of May 29, 2025
According to the committee, the purpose of the bill was, among others, to: create “clear, functional requirements for digital asset market participants, prioritizing consumer protection while supporting innovation.”
Committee he said the bill was needed for several reasons, mainly because digital assets represent the next step in digital financial innovation and that the regulatory status quo stifles opportunities.
June-July 2025: The House adopts the Cryptocurrency Act
The House of Representatives began work on the CLARITY Act with uncharacteristic speed. In June, the bill passed through the House Agriculture and Financial Services committees and was placed on the calendar for a floor vote through June 23.
On July 17, the House of Representatives passed the bill by a majority of 294-134. The vote was met with greater support among Republicans. About 216 Republicans supported the bill, none opposed it and four abstained.
There was some bipartisan support: 78 Democrats joined in the “Yes” vote, while the majority of them, 134 Democratic Representatives, voted “No.” No Democrat abstained.
After the vote, the bill was moved to the upper house, the US Senate, where it has been the subject of debate ever since.
July-September 2025: The Senate begins work
The Senate quickly started working on CLARITY. On July 22, Republican leaders on the U.S. Senate Banking Committee released the bill.
Discussion design “would establish a clear distinction between digital asset securities and commodities, modernize our regulatory framework, and position the United States as a global leader in digital asset innovation.”
Senate Banking Committee Chairman Tim Scott was bullish that the Senate would act as quickly as the House, giving tentative deadline September 30, 2025
October–December 2025: Senators argue during government shutdown
Democrats on the Senate Banking Committee, including well-known cryptocurrency skeptic Senator Elizabeth Warren, opposed several parts of the discussion bill.
Warren disagreed with how taxes would be treated under the law, saying in a statement that “proposals to clarify how cryptocurrencies are taxed could ultimately give cryptocurrencies an unfair advantage over other financial products.”
She also said the proposals “make it difficult to track what is happening in crypto transactions if they are used for illicit purposes.”
Senate Democrats also presented their own proposals for how the bill would regulate DeFi. According to partners at Skadden Arps Slate Meagher & Flom these DeFi principles wanted to “leverage the existing regulatory framework to structure the cryptocurrency market and demonstrate Congress’s instinct to modernize the current system rather than design one built for cryptocurrencies.”
This was diametrically opposed to the vision of Republicans and the crypto industry, which was to create a novel, bespoke system for the digital asset industry.
On November 11, 2025, the Senate Committee on Agriculture published its own CLARITY discussion project. The bill notes that lawmakers are still debating which federal agency – the Commodity Futures Trading Commission (CFTC) or the Securities Exchange Commission (SEC) – would regulate the industry.
Further hampering progress was the US federal government’s shutdown from October 1 to November 12 – the longest on record after the previous one that occurred during President Donald Trump’s first term. It ended only after a diminutive group of Senate Democrats voted with Republicans to adopt a resolution to temporarily fund the government.
December 2025 – January 2026: Marker Session, Crypto Industry Gets Impatient
Senator Cynthia Lummis predicted in the fall that a crypto framework bill would reach Trump’s desk before New Year’s Eve. As 2025 drew to a close, this seemed less likely.
On December 19, White House cryptography and artificial intelligence czar David Sacks said that after meeting with leading senators working on CLARITY, there would be a session on markup in January.
However, the planned markup session in the Senate Banking Committee was postponed due to substantive disputes regarding the bill with the cryptocurrency industry lobby and the banking industry.
Coinbase CEO Brian Armstrong said they couldn’t support the bill because of its provisions banning interest-bearing stablecoins as well as positioning the SEC as the main regulator of the cryptocurrency industry.
Related: The U.S. Cryptocurrency Market Structure Act is in limbo as the industry attracts support
The move reportedly enraged the White House, which wanted to complete work on the framework bill.
Other influential financial figures, such as David Solomon, CEO of Goldman Sachs, agreed with Armstrong, saying the bill had a “long way to go.”
Work on the act has not stopped completely. The Senate Agriculture Committee announced it will have its own tag session on January 27. The Democratic committee attempted to introduce amendments to the bill, including an ethics provision prohibiting Congress from dealing in cryptocurrencies, as well as excluding any possibility of a government bailout of cryptocurrencies.
These voices lost along party lines, and a majority of Republicans advanced the bill to the Senate.
February 2026: High-level talks at the White House, political maneuvers
Cryptocurrency industry executives, lawmakers and bankers now meet frequently in the White House and the halls of Congress to find a solution to their differences. The Digital Chamber of Commerce said the February 3 meeting focused on the viability of stablecoins.
These conversations are continuing. On Tuesday, more executives, including Ripple’s chief legal officer Stuart Alderoty, met for a “productive session.”
“Clear bipartisan momentum remains for sensible cryptocurrency market structure legislation. We should act now – while the window is still open,” he said.
Despite this, no agreement was reached. According to data from CoinShares, the delays led to an outflow of almost $1 billion from the cryptocurrency market. Some observers believe that delays are ultimately beneficial in the long run because they give the industry a chance to negotiate more favorable terms.
Market analyst Michaël van de Poppe said: “I think that if the bill were approved in its current form, it would have a very bad impact on the markets overall. So now all parties are in agreement to continue the discussion. It reminds me a lot of the regulation of cryptocurrency markets (MiCA) in Europe.”
Many want to seal the deal before the midterm elections. The cryptocurrency lobby builds its political machine through donations to political action committees (PACs). Both Republican and Democratic members of Congress are reportedly eager to pass something favorable before the start of the 2026 campaign cycle, and crypto PACs will decide who to support.
Related: Crypto PACs are securing huge war chests ahead of the US midterms
Crypto’s powerful support within the Republican Party could also prove to be a liability as a party loses popularity. Midterm elections historically go against the incumbent president’s party, and a year from now the crypto lobby could be stuck with a lame-duck president and lukewarm support from a majority of Democrats.
The success of the CLARITY project may end in a race against time.
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