Senate delays CLARITY cloture to September; crypto critics irked

The Senate postponed a cloture vote on the Digital Asset Market Clarity Act until mid-September after Majority Leader John Thune filed cloture and the chamber recessed for a month. The cloture motion sets up a return vote when senators reconvene and requires 60 votes to clear procedural hurdles for floor consideration.

Industry executives and some lawmakers expressed frustration that the bill did not advance before the recess. Senator Cynthia Lummis expressed her frustration and urged colleagues to keep working: “You can imagine how frustrated I am. I will continue working with my colleagues to get this done — this fight is far from over.” Coinbase CEO Brian Armstrong and chief policy officer Faryar Shirzad described the postponement as “disappointing” and indicated they expect September will be the window to “finish the job.”

Banking groups criticized provisions in CLARITY that could allow entities to pay interest to stablecoin holders in certain situations. They argue those rules could disadvantage smaller banks that rely on interest to attract deposits and have pushed for language changes to protect banks and the broader financial system.

Senators held bipartisan talks on market structure but did not announce compromise language on contested items before the recess. Some Democrats sought stricter ethics and disclosure rules related to the president’s crypto investments. Lawmakers have also raised questions about a family-linked crypto business and a memecoin tied to presidential projects.

Prediction markets showed mixed expectations. One contract with about $1.23 million wagered priced a high probability that the Senate would vote on CLARITY before Oct. 1, while another market with more than $5.7 million in wagers placed lower odds on the bill being signed into law this year. If the Senate approves CLARITY, the bill would return to the House for another vote before reaching the president.

Market analysts said investors appear focused on recent softer inflation and jobs reports rather than the bill’s delay. Tom Lee noted that markets seem more interested in macroeconomic data than the immediate legislative timetable for crypto rules.

With the Senate scheduled to reconvene in mid-September, proponents must secure 60 votes for cloture and then a majority for final passage. Lawmakers and industry backers plan to continue negotiating changes to the bill while opponents and some banking groups press for amendments addressing deposit and consumer protections.