Crypto Regulation Stalls After Senate Defeats CLARITY Act
The US crypto regulation landscape has taken a significant hit after the Senate's 49-50 vote against the CLARITY Act. The bill, which aimed to provide clarity on digital asset oversight, was stalled due to disagreements over ethics language governing crypto holdings of public officials.
Despite this setback, the conversation in Washington has shifted towards creating a new version of the bill, dubbed CLARITY Act 2.0. Senator Cynthia Lummis published updated substitute text on her website, which is now being considered as the starting point for the rewritten bill.
The calendar is working against the Senate's efforts, with fewer than 36 legislative days remaining before a new Congress is sworn in in January 2027. If Democrats win either chamber in November, the bill's chances will shrink further, according to prediction markets that currently put the odds of CLARITY becoming law in 2026 at around 18%.
Regulators are not waiting for Congress to act, with both the SEC and CFTC moving forward on their own with agency guidance. However, this approach has its limitations, as an agency rule can be rewritten by the next chair without going near the Senate floor. In contrast, a law passed by Congress would provide more durable regulation.
The stablecoin market already has its federal framework through the GENIUS Act, which passed with broad bipartisan support in 2025. However, everything else remains governed by agency interpretation, leaving traders and investors without clear regulatory clarity.