The crypto industry has launched a renewed push in support of the Clarity Act ahead of a key procedural vote in the Senate on September 15. However, Republican lawmakers are worried the bill could fail if lawmakers disagree over ethical concerns around President Trump’s crypto interests.
The Clarity Act will help establish clear rules and divide oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Crypto Industry Launches Clarity Act Push
The United States Senate will decide whether to invoke cloture on a motion to proceed to the Clarity Act on September 15. The motion requires 60 votes to pass. The act will establish clear federal rules for crypto and clearly define oversight of the sector between the SEC and CFTC. However, some Republican lawmakers worry the bill may fall short of the required votes.
With support wavering, the crypto industry has launched a campaign to drum up support for the bill. The campaign emphasizes consumer protection and endorsements from outside the company, and criticizes the banking industry, which has vehemently opposed some sections of the Clarity Act. The campaign pushes back against the banking lobby, accusing it of blocking competition to secure profits.
The banking industry has pushed back against the bill, particularly sections governing stablecoin rewards. Banks argue stablecoin rewards could pull deposits away from the traditional banking system, potentially compromising the entire system. The latest push also attempts to broaden the bill’s appeal beyond crypto and highlights support from several law enforcement groups.
Ethics Provisions Could Become Bill’s Undoing
While the industry attempts to drum up support, a key political issue could become the bill’s undoing. Republican senators are treading a fine line as they grapple with ethical concerns around a sitting president and his family profiting from crypto. Lawmakers are deeply divided over ethics restrictions in the bill, with Republican senators Mike Rounds and Thom Tillis concerned the bill may not pass as Democrats push for stronger restrictions.
A Semafor article claims Democratic Senators believe very little progress has been made regarding demand for stronger ethics provisions that adequately cover the president and his family. Senator Rounds called the outlook “bleak,” while Tillis believes the legislation will fail to pass unless the White House compromises on some provisions. However, President Trump appears in no mood to negotiate, with a White House spokesperson urging Congress to pass the legislation.
Will The Clarity Act Pass Before Midterms
Republican senators are scrambling to secure the votes needed to pass the legislation before the end of the ongoing session. Republicans have already cut short the remaining runway for the Clarity Act. This means even if the act passes the Senate, final actions could be pushed beyond the November midterms. Additionally, Senate changes will need House approval before the legislation reaches the White House. Senator Cynthia Lummis, one of the administration’s biggest crypto advocates, urged Congress to pass the act, warning China could gain the upper hand if the legislation fails.
Lummis also highlighted several provisions included in the bill to protect consumers when crypto companies fail. Intermediaries are required to segregate customer assets, and some holdings will be treated as customer property in cases of bankruptcy. However, these protections will depend on the contractual agreement between customers and crypto platforms, and how the assets are held.
Lummis also warned that failure to pass the legislation could be a substantial setback, costing years of investments, jobs, and tax revenue.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
