Crypto bill prospects face Senate and political hurdles before midterm election

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Crypto bill Senate hurdles

Highlights

Senate Majority Leader John Thune may begin procedural steps on the Clarity Act the week of July 13, but passage before the July 24 deadline remains uncertain.
Democrats are pushing an ethics amendment barring officials from crypto business ownership, while several moderate and retiring Republican senators' votes remain unpredictable.
Law enforcement and banking groups warn Section 604 could reduce crypto oversight, with Galaxy Research and JPMorgan tempering expectations for the bill’s passage in 2024.

Senate timeline and unresolved vote risks

As reported by The Block and TD Cowen, Senate Majority Leader John Thune is likely to begin the procedural process on the Clarity Act during the week of July 13, potentially setting up a floor vote that week or during the week of July 20. In a Monday note, Jaret Seiberg, managing director at TD Cowen's Washington Research Group, says passage before the election is far from assured because major political and policy hurdles remain.

Seiberg identifies July 24 as the critical deadline before the House starts its August recess and says there are open questions over whether the bill could still move later in the year if lawmakers do not approve it before then. He also says Democrats are expected to press Republicans on politically difficult amendments, making Republican support more dependent on confidence that Trump would eventually sign the legislation.

That calculation has become less certain after Trump recently refused to sign a housing bill negotiated by his own administration and said he will not sign legislation until Congress passes the SAVE Act on elections. While Seiberg says Trump could make an exception for the Clarity Act, he adds that the uncertainty raises the risk of delay.

Ethics, enforcement and industry opposition shape outlook

Another complication is a Democratic push to bar government officials and their families from owning crypto businesses, a proposal that would also apply to the president. Seiberg says Trump has not indicated any willingness to compromise, which could force Republicans to vote down an ethics amendment even as support in the GOP caucus remains unclear.

He says several Republican senators, including Thom Tillis, Mitch McConnell, Bill Cassidy, John Cornyn, Susan Collins and Lisa Murkowski, are being closely watched because retirements and moderate positions could prove important in a close vote. Law enforcement concerns are also still under discussion, with the White House holding meetings on whether software developers should be held responsible if crypto tools they create are later used for money laundering or other illicit finance.

Last week, law enforcement groups sent a letter to the White House arguing that Section 604 of the Clarity Act, known as the Blockchain Regulatory Certainty Act, could create oversight gaps and make illicit crypto investigations harder. Seiberg also says he does not expect changes to the bill's stablecoin yield provisions, meaning banks are likely to keep opposing the measure, while Galaxy Research and JPMorgan have both recently lowered or kept subdued their expectations for the bill's chances this year.

Our earlier Coinbase (COIN) price analysis highlighted sustained bearish technical pressure, with the stock trading below major moving averages and showing weak momentum despite some signs of short-term seller exhaustion. It also noted that, while Coinbase has pursued notable growth and regulatory milestones, investors were still focused on resistance levels and broader market headwinds that kept upside limited.

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