As divisions linger, Senate punts CLARITY Act to September

• Key insight: Senate Majority Leader John Thune, R-S.D., said the upper chamber will put off voting on the CLARITY Act until after senators return to Washington in mid-September, dashing the hopes of many in the crypto industry that passage could be secured before the August recess.
  
• Expert quote: "The [Democrats] are insistent on no Clarity vote. I worked with sponsors of the bill.We're getting that queued up first thing when we come back." — Thune
  
• Forward look: The bill's likelihood of passage has dimmed considerably due to increased demand for floor time after the August recess and the need for lawmakers to campaign ahead of the midterm elections.

As the Senate takes its final votes before leaving town for the August recess, Senate Majority Leader John Thune, R-S.D., has acknowledged that the embattled CLARITY Act will not be among the bills considered.

In a post on X Thursday night, a Thune spokesperson quoted the majority leader as saying that Democrats' insistence on blocking the bill pushed him to delay a vote until after the August recess.

"The Dems are insistent on no Clarity vote," Thune said. "I worked with sponsors of the bill. Sen. [Cynthia] Lummis [R-Wyo.] was great, and we're getting that queued up first thing when we come back." 

The announcement caps weeks of back-and-forth involving Democratic and Republican lawmakers, as well as the crypto and banking industries. The crypto industry has been in favor of the most recent bill language, which includes a White House-approved provision limiting the ability of public officials to issue and benefit financially from crypto offerings. 

The banking industry, meanwhile, has balked at the bill's language barring stablecoin yield, arguing that it's insufficient to prevent an outflow of core deposits from banks. Democrats have likewise whipped votes against the bill because the ethics provision includes a carveout for President Trump and his crypto holdings, which have earned the president more than $1 billion since he returned to office last year.

Under Senate rules, a vote for cloture — that is, a vote to end debate and forestall a filibuster — must be scheduled for at least 30 hours before it can take place. Once that cloture vote is taken, the bill will be open to debate and amendment for another 30 hours. It is still possible for Thune to schedule the cloture vote before the Senate leaves town Friday, thus speeding the voting process once the Senate returns.

But it's not clear that the bill has enough support to move forward. Sixty votes will be necessary to invoke cloture, meaning the measure was always going to require substantial Democratic support.

Read more:

• Should a bank ever be liable when a customer gets scammed?
• OpenAI models' Hugging Face breach is a red flag for bankers
• The top-performing banks with $2B to $10B of assets in 2025
• Inside Upstart's journey to get a bank charter approval

In recent days, some Republicans have also expressed opposition to the bill's current language. Sen. Josh Hawley, R-Mo., said this week that he is against the bill because of community banks' concerns about the stablecoin-yield language. Sen. Jerry Moran, R-Kan., likewise said he now opposes the bill for the same reasons.

The CLARITY Act has been a priority of the crypto industry for most of the 119th Congress, and banks have likewise viewed the bill as their best chance to tighten the legal restrictions against allowing stablecoin issuers to pay yield or rewards. But much of the debate in recent weeks has been about ethics provisions aimed at reducing the potential for public officials to profit from crypto holdings while in office.