U.S. crypto bill faces September hurdle in Senate

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U.S. crypto bill Senate delay

Highlights

Senate delays vote on the Clarity Act until at least September 15, with a cloture motion requiring 60 votes to limit debate and advance the bill.
Mounting election pressures and disputes over anti-money laundering safeguards, official business restrictions, and stablecoin rewards reduce chances for crypto bill passage in 2024.
Polls suggesting Democrats may retake the House in November further dim prospects for the Clarity Act as next year's House priorities are expected to shift away from crypto regulation.

Senate timetable slips into September

As reported by Reuters, the Senate departs Washington on Saturday for a five-week August recess without a vote on the Clarity Act, a bill designed to create a regulatory framework for digital assets.

The crypto industry has spent hundreds of millions of dollars backing the measure, arguing it would give companies clearer legal footing. Critics, including Democrats, some Republicans and other opponents, say the bill does not contain strong enough anti-money laundering and ethics safeguards.

Senate Majority Leader John Thune files for cloture on Saturday, setting up a September 15 vote on whether to limit debate and move the bill toward a full floor vote. That step requires 60 votes and is seen as a crucial test of whether the legislation can still advance.

If cloture succeeds, Senate rules could still require days of additional procedure before any final vote, including debate and possible amendments. That timing is difficult because lawmakers later in the year also need to handle defense and government funding bills.

Election politics and industry disputes weigh on outlook

Analysts and lobbyists say the bill faces long odds because the November elections are beginning to dominate attention in Congress, while the Senate schedule is set to tighten further. If the process extends into 2027, the election outcome could become an even larger obstacle.

Polls favor Democrats retaking the House, which would still need to approve the Senate version of the Clarity Act. Analysts say House Democrats next year are expected to focus more on oversight of President Donald Trump's administration than on advancing crypto legislation.

Wyoming Republican Senator Cynthia Lummis, a central negotiator on the bill, signals the difficulty in a social media post after the delay, writing that "death by 1,000 cuts is just as fatal as a bullet." Still, some industry backers remain hopeful, with Digital Chamber Chief Executive Cody Carbone saying there is still room for the Senate to act in the week of September 14.

The bill defines the legal status of tokens, assigns regulatory oversight and sets obligations for crypto companies. It also bars government officials from running their own crypto businesses, an issue that remains contentious because Democrats want tougher language and stronger enforcement powers for state attorneys general.

Another major dispute involves whether crypto exchanges and others can pay rewards on customer holdings of dollar-backed stablecoins. Banks argue that allowing such rewards could pull deposits away from lenders, while crypto companies say a ban would be anti-competitive, leaving another unresolved issue ahead of the September vote.

Our earlier coverage of the Senate’s delay on the Clarity Act explained how the stalled vote prolonged uncertainty over a federal digital-assets framework, even as the crypto industry ramped up campaign spending and lobbying. We also noted that the bill became intertwined with election-year politics and ethics debates, including proposals to tighten restrictions on federal officials’ crypto interests and concerns about how the rules could affect enforcement and financial-sector competition.

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