Author: Blockchain Knight
Yesterday, the U.S. Senate released its agenda for the week, but the CLARITY Act was not on it at all.
Instead, a procedural vote on an alternative resolution is taking place. August 7 is the Senate’s recess date, leaving only 72 hours for the bill.
The Senate’s procedural hurdles are extremely cumbersome. First, a motion to end debate requires the signatures of 16 senators. Second, passage requires 60 votes, but even if all Republicans voted yes, they would have only 53 votes—meaning at least seven Democrats would need to join them.
It was these seven individuals who stalled the bill for two months. Third, if the vote passes, there must still be 30 hours of debate before voting on whether to proceed to consideration.
If 16 signatures are not obtained by Wednesday Eastern Time, the bill won’t even have a chance to be vetoed. Even if the application is submitted on Wednesday, with voting earliest on Friday, the recess will begin, leaving no time for the bill to be reviewed.
The biggest point of contention in the current bill remains the ethics provisions: the draft prohibits certain senior officials from issuing or sponsoring digital assets before 2029, but Democrats argue that the enforcement loopholes are too large, failing to effectively constrain existing holdings and family arrangements.
To date, the White House has not formally responded to the draft revision. The Trump family’s substantial profits from crypto assets have further eroded Democratic confidence in the bill.
In addition, stablecoin rewards remain a powder keg: banks view the reward mechanism as similar to deposit interest, which could draw funds away from traditional banking systems, while crypto companies argue it protects banks from competition.
The current compromise prohibits passive interest but allows trading, staking, and platform activity rewards (which is also why Ethena has performed well recently, as it would become a potential beneficiary if the bill passes).
Polymarket data shows the probability of the bill passing in 2026 has dropped to 31%, a 7-percentage-point decline from a week ago and a 9-percentage-point drop over the past month; the associated betting volume is approximately $3.7 million, compared to 74% at the beginning of the year.
Investment firm Bernstein warns that if the Senate fails to advance the bill before adjourning, it could trigger a negative-market sell-off, putting further pressure on the valuations of Bitcoin and the broader crypto asset class.
Grayscale has urged the Senate to vote promptly last week, with Treasury Secretary Bentsen also publicly calling for action, and industry representatives have contacted Congress over ten thousand times in total, but progress has consistently fallen short of expectations.
This Friday is the last working day before the recess; if this week is missed, the bill will be delayed until September, when the Senate’s agenda is busier and legislative time is harder to secure due to the upcoming midterm elections.
Democrats say that if procedural voting can be initiated this week, it would at least leave a glimmer of hope for the September reconvening, but that glimmer is shrinking by the hour.
Of course, if the bill continues to be delayed this week, market performance suggests that expectations have already dwindled. On the contrary, if the low-probability event of passage were to occur, the market's reaction could far exceed expectations.
Looking back at the introduction of past cryptocurrency legislation, it seems none has faced such difficulties, highlighting the significance of this bill for the industry.