The Clarity Act will face a preliminary Senate vote on Tuesday, a pivotal test for long-debated legislation to set a federal framework for cryptocurrencies and other digital assets. Former President Donald Trump has agreed to back additional ethics restrictions, but it is unclear whether the bill has the votes to advance as last-minute lobbying from banks and the crypto industry intensifies.
The Clarity Act has been mired in the Senate for months after clearing the Banking Committee in May. Senate leaders have struggled to round up the 60 votes needed to overcome a filibuster, which would require at least seven Democrats if all senators are present.
Tuesday’s vote would end debate and allow the chamber to move toward passage, but unresolved disputes have put the outcome in doubt.
Clarity Act negotiations sharpen on ethics and stablecoins
Banks warn they cannot support the measure unless it blocks interest-like rewards on stablecoins, arguing such payouts could pull deposits from community banks into higher-yield crypto accounts. Democrats, most of whom opposed advancing the bill in committee, have demanded tougher ethics language to prevent Trump, his family and federal officials from profiting from crypto ventures.
Republican leaders released updated bill text late Sunday that they described as their final offer to meet Democratic concerns. The draft reflects a bipartisan ethics framework negotiated by Sens. Thom Tillis, R-N.C., and Ruben Gallego, D-Ariz., that Trump has agreed to, including a key provision allowing state attorneys general to enforce federal ethics requirements.
The update also seeks to address banking concerns by directing the Treasury secretary to curb stablecoin rewards if significant deposit flight from community banks occurs. Senate Majority Leader John Thune, R-S.D., put Tuesday’s vote on the calendar before the August recess.
Supporters hope to secure enough backing to keep the measure alive. Sen. Cynthia Lummis, R-Wyo., a lead sponsor, argued in a Monday statement that the latest text is bipartisan and incorporates more than 120 Democratic requests, adding that a vote against advancing the bill would block ethics reforms and cede leadership on digital assets to foreign competitors.
Many Democrats remain opposed, citing unresolved ethics issues tied to potential Trump-linked crypto ventures. Sen. Chris Van Hollen, D-Md., said in a Sunday video that the bill is being sold as consumer protection but still has substantial flaws and should not pass.
Even so, the Clarity Act is widely seen as a toss-up. A Democratic aide familiar with talks said enough Democrats may vote to proceed, in part because Thune has described the tally as a “free vote” to continue debate.
Backers emphasize that Tuesday is not the final vote, and that senators could offer amendments later. Sen. Bernie Moreno, R-Ohio, a bill co-lead who received support from crypto interests in 2024, underscored on X that the vote is about whether to consider the bill, not final passage.
The White House has signaled that additional concessions on ethics and other issues could follow if the Senate first agrees to proceed. In an emailed statement, the press office said the administration has worked with Congress on the Clarity Act and agreed to sweeping ethics provisions, reiterating the president’s call for Congress to pass the measure to maintain U.S. leadership in innovation.
Clarity Act faces pressure from banks and crypto industry
Crypto firms are optimistic. Coinbase CEO Brian Armstrong said last week that the bill is ready for Senate backing and that regulatory clarity is coming regardless, noting the SEC and CFTC plan to publish rulemaking shortly even if the measure fails.
Banks remain a major hurdle. The Independent Community Bankers of America and other groups have led opposition over stablecoin yield, arguing the bill does not go far enough to protect deposits.
In a Thursday letter to Thune and Senate Minority Leader Chuck Schumer, D-N.Y., the American Bankers Association and nearly 80 banking organizations urged stronger prohibitions on stablecoin interest, yield and rewards to safeguard community bank funding and local lending.
The latest text does not appear to fully satisfy those concerns. Brooke Ybarra, senior vice president for innovation and strategy at the ABA, said bankers nationwide have pressed senators on the need to preserve deposits that support lending to small businesses, farmers and families.
She expressed confidence that objections to the current “interest loophole” will sway lawmakers, adding that targeted changes could improve the bill’s prospects. If Tuesday’s vote fails, leaders could attempt to revive the package in amended form, but time is short before the end of the current Congress.
For now, supporters and opponents alike are bracing for a high-stakes test of whether the Senate will keep the Clarity Act in play, as Trump remains a central figure in the broader policy debate.
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