US Senate Majority Leader John Thune has moved a bill to create a regulatory framework for cryptocurrencies, which, if passed, would mark a massive victory for President Donald Trump and the crypto industry.
Thune, a Republican, on Saturday (August 8), filed the bill, called the “Clarity Act,” following which a key procedural vote will be set up when the Senate returns from its August recess in mid-September, stated the US Senate Press Gallery website.
Amid opposition from the Democrats, Senate Republicans believe they may be able to put together the 60 votes needed for the bill to pass. However, the bill still needs the support of at least eight Democrats and all of the Senate’s voting Republicans for it to pass.
The legislation, if passed, would give the crypto industry its first comprehensive federal rulebook, defining when digital tokens will become securities or commodities and which regulators will oversee them.
As per the crypto industry, the act is necessary to provide legal clarity for the industry and could potentially boost the adoption of these virtual currencies.
If the “Clarity Act” passes the Senate test, it would also mark the second biggest crypto policy victory for Donald Trump, after he signed a bill supporting dollar-backed tokens known as stablecoins into law in 2025.
The crypto industry played a significant role during the 2024 Presidential election, by pumping more than USD 119 million backing pro-crypto candidates, with the hope of advancing major industry reforms.However, banks will lose big time from the bill, as crypto companies will be able to effectively compete for bank deposits by offering rewards on customer stablecoin holdings.Trump has prioritized crypto reform during his second administration, with the White House reportedly emerging as the big supporter of the “Clarity Act.”
Democrats, on the other hand, want more restrictions on government officials’ crypto ventures, with negotiations on the matter failing to fetch any fruitful result to date.
Another concern among the opposing lawmakers has been the lack of tough money laundering and ethics safeguards.
Also analsysts and crypto industry lobbyists have remained a bit apprehensive, given the fact that the House of Representatives and roughly a third of the Senate will be up for reelection in the November 2026 mid-terms.
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“I think it’s a long shot,” said Brian Gardner, chief Washington policy strategist at Stifel, while interacting with the Reuters, adding lawmakers do not appear to be close to an agreement, particularly on contentious ethics provisions.
The Senate returns on September 14 and is scheduled to be in session for just 14 days before the October election recess and a further 22 days before year-end.
Thune has filed for “cloture,” setting up a September 15 vote on whether to limit debate on the bill and advance it to a full floor vote. Exactly 60 votes are required to decide the bill’s future. As per the lobbyists, a failed cloture vote could effectively kill the bill.
If it succeeds, Senate rules could then require days of further procedural steps before a final vote, including debate and consideration of following amendments. Finding that time will be challenging, as the chamber usually has to consider other essential defense and funding bills later in the year.
If the bill drags into 2027, the midterm outcome may become a major obstacle, as per the analysts.
While the Senate leadership is up for grabs, poll trends favor Democrats in terms of regaining the majority. If the results go as per the projections, then the analysts see “Clarity Act” going into the backburner, as the House Democrats, in 2028, may focus on oversight investigations of the Trump administration rather than prioritising crypto legislation.
In a social media post, Wyoming Republican Senator Cynthia Lummis, who had played a central role in drafting and negotiating the bill, acknowledged a complicating path forward for the bill.
“Death by 1,000 cuts is just as fatal as a bullet,” she wrote.
However, a section of the crypto industry is still hopeful about the bill passing the legislation test. Cody Carbone, chief executive of crypto industry trade group the Digital Chamber, while terming the delay “disappointing,” but said he believed there was still room for the Senate to advance the bill in the week of September 14, adding, “The fight is far from over.”
Apart from defining the legal status of the virtual tokens, the “Clarity Act” also specifies which regulators oversee the cryptocurrencies and imposes other obligations on crypto companies. Government officials will be banned from operating their own crypto businesses.
However, Democrats reportedly want much tougher language that would allow state attorney generals to act as a second line of defense in enforcing that ban, empowering them to sue the Justice Department if they believe the agency is not being tough enough. Along with these lawmakers, a section of Senate Republicans are also pushing for tougher anti-money laundering controls.
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The bill also deals with the extent to which crypto exchanges and other players are allowed to pay rewards on customer holdings of dollar-backed tokens called stablecoins. It has invited opposition from the American banks, who believe that the measure would create competition for deposits that fund lending. Crypto companies say that prohibiting rewards would be anti-competitive.
Some Republican senators are not ready to back the “Clarity Act” without stronger protections for community bank deposits.