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Senate Stalls CLARITY Act as Democrats Withhold Support

Unresolved fights over enforceable ethics language, illicit-finance rules and stablecoin yield have left leaders short of the 60 votes needed to close debate before the August recess.

Overview

  • The CLARITY Act was left off the Senate floor schedule on Tuesday, narrowing the window for leaders to file cloture and secure the 60 votes required to advance the bill.
  • A bloc of Senate Democrats has said they will withhold cloture unless negotiators strengthen ethics limits, tighten anti-money-laundering and illicit‑finance language, and change stablecoin yield rules.
  • Senate Majority Leader John Thune continues to signal he wants a procedural vote this week, but no cloture motion had been filed as of the last published schedule, making an imminent test of support unlikely.
  • Markets and industry reacted quickly: prediction markets cut the odds of enactment, major crypto firms and trade groups urged passage, and some law‑enforcement organizations publicly pushed back on DeFi carve‑outs.
  • If the bill fails before recess, lawmakers and analysts expect prolonged delay that could shift key choices to SEC/CFTC rulemaking (Project Crypto), raise near‑term market volatility, and leave long‑term jurisdictional questions unresolved.