Senate Votes Down Controversial Crypto Bill, Banks Celebrate 'Win'

A contentious crypto market structure bill known as the CLARITY Act suffered a decisive defeat in the Senate, where it was voted down from even getting debate time on the floor.

The bill, which had been a long-time priority of the crypto industry, aimed to clarify and regulate the relationship between banks and cryptocurrencies. However, its failure is seen as a win for the banking industry, which has lobbied against the bill's provisions.

While some lawmakers may still try to revive the bill in the current Congress, the chances of it being called up again are 'exceedingly slim,' according to analysts.

If Democrats win back both the House and Senate in the 2026 midterm elections, as polls suggest they may, the banking industry could face a new set of challenges. Sens. Jack Reed, D-R.I., and Tina Smith, D-Minn., had offered an amendment with banks' preferred language banning yield on stablecoin holdings, but it was denied a vote.

Should Democrats prevail, Sen. Elizabeth Warren, D-Mass., who has expressed concerns about the crypto industry's advancing tendrils into the banking system, could become the new chair of the Senate Banking Committee and codify her ethics concerns into any future attempt at a crypto market structure bill.