Written by: Forbes
Compiled by: AididiaoJP, Foresight News
Bipartisan lawmakers in the U.S. Congress are preparing to advance crypto market structure legislation, the closely watched Clarity Act. Like all landmark bills before it, whether a compromise can be reached on contentious issues will determine the fate of this legislation.
For the Clarity Act, the road has been quite bumpy.
In January of this year, Coinbase CEO Brian Armstrong suddenly intervened, overturning the bipartisan agreement and vote that had been reached in the Senate Banking Committee. The bill has not been effectively revived since.
Racing Against the Congressional Clock
Another four months passed before the committee could schedule the bill on the congressional calendar. This green light came thanks to a bipartisan compromise on the issue of "yield" between Maryland Democratic Senator Angela Alsobrooks and North Carolina Republican Senator Thom Tillis.
It was a positive development, but by then, ethics provisions had become a key non-negotiable for Democrats. Ultimately, when the committee advanced the bill in May, it received support from only two Democratic senators—Alsobrooks and Arizona Senator Ruben Gallego. Both made it clear that their next vote would depend on how ethics issues were handled.
Senator Alsobrooks stated her position clearly in a statement: "I have been working hard to make this bill better. Let me be very clear: my vote today is to continue working in good faith. This does not mean I will support the Clarity Act on the Senate floor. We still have work to do."
Senator Gallego expressed a similar view: "My vote today is to allow us to continue these efforts. But I want to be clear: my vote here does not guarantee my support on the floor. There are many outstanding issues we need to resolve. The toughest and most critical is reaching an agreement on ethical guardrails for elected officials."
Due to the failure to reach an agreement on ethics, the Clarity Act in the Senate Agriculture Committee was passed along party lines, with no Democratic support.
Is Crypto Policy Compromise Possible?
Entering the high-temperature period of July, Senate Republicans are rushing to schedule a floor vote. At this point, it's not just Democrats demanding ethics provisions. Disputes over yield have also pushed more Republicans to side with big banks, while law enforcement agencies strongly oppose developer protection clauses.
Illicit finance and consumer risks remain core concerns, as highlighted by statements from two senior senators last week.
Wyoming Republican Senator Cynthia Lummis posted on X, emphasizing consumer protection provisions: "We drafted the Clarity Act to give law enforcement more tools, not fewer. The bill codifies real-time interception between exchanges and investigators, allows freezing of illicit funds within hours instead of years, and preserves all money laundering charges that investigators already rely on."
Virginia Democratic Senator Mark Warner, speaking at a recent Senate Banking Committee nomination hearing, expressed both optimism and concern about bad actors: "I want to get this done. I'm tired of being in 'crypto hell.' But we have to do it in a way that doesn't make things worse. I want the U.S. to lead in digital assets. If we mess this up, the consequences are equally huge."
What Is the Path Forward in Congress?
Yes, there is bipartisan consensus on the need for market structure legislation, but compromise—the hallmark of Washington's legislative system—is facing significant headwinds.
Nevertheless, momentum is building. On July 17, the House Financial Services Committee held a field hearing in New York City. Senator Lummis and Ohio Senator Bernie Moreno met with White House officials to discuss the bill and explore possible ethics language.
There is widespread anticipation for a reconciled text between the Senate Banking Committee and Agriculture Committee versions, which could be released later this week. However, some lawmakers question whether it can garner sufficient bipartisan support. Senator Gallego said in an interview last week: "They are taking their own version of ethics provisions to the President, not what we Democrats agreed to... At the end of the day, we don't have strong ethics provisions. I don't care what the President says. Without Democratic votes, it won't pass."
Congress Holds Legislative Authority
It is Congress, as the legislative branch, that can advance legislation. Can congressional Republicans obtain a strong ethics agreement from the executive branch that Democrats are willing to co-sign? The answer seems to vary. Grassroots enthusiasm in the industry is high, news reports are filled with speculation, and C-level executives are generally optimistic.
But beyond the noise, does the crypto community have short-term collective goals in the congressional process?
- Symbolic Senate floor action before the August recess, even if votes are insufficient?
- Passage in both chambers, ultimately signed into law in 2026?
- Through rigorous debate, reach a framework that includes compromises on ethics and BRCA (bank-related clauses?) to supplement the previously reached yield agreement?
Most likely, all of the above. Since the bipartisan passage of the Financial Innovation and Technology for the 21st Century Act (FIT21), substantive work to advance Clarity has never stopped.
At this stage, setting clear goals helps clarify the timeline and provides guidance for bipartisan strategies on Capitol Hill when the July sprint hits obstacles.
Although the obstacle course for the Clarity Act is bumpy, the long and frustrating tradition of counting votes and winning bipartisan support one lawmaker at a time is a tactic the crypto industry has time to employ and refine.
