Senate to Hold Key Vote on Major Crypto Bill

The Senate will hold a procedural vote on a sweeping cryptocurrency bill on Sept. 15, potentially giving the industry clearer regulatory direction.

The Clarity Act—legislation that would establish a comprehensive regulatory framework for cryptocurrencies and other digital assets—has been stuck in the Senate for months.

Cleared in the Banking Committee in May, the bill has stalled on the floor as leaders struggle to assemble the 60 votes needed to end the debate and move it toward final passage. At least seven Democrats are necessary to avoid the filibuster.

Democratic lawmakers and the banking industry have requested changes.

For months, several Democratic senators have demanded enhanced ethics language to prevent the president and his family from profiting on crypto.

“While Americans across the country suffer from an affordability crisis, this bill will turbocharge President Donald Trump’s ability to rake in billions and billions of dollars from crypto,” Sen. Elizabeth Warren (D-Mass.) said on the Senate floor on Sept. 14.

Banks say they cannot support the legislation unless it includes a remedy to curb interest-style payouts on stablecoins. They warn these payments could persuade clients to transfer their traditional bank deposits into higher-yield crypto accounts.

‘Long Way to Go’

Senate Republicans released updated text that they say responds to these requests.

The legislation now includes a provision allowing state attorneys general to impose ethics requirements on federal officials. This inclusion received the president’s endorsement, said Sen. Cynthia Lummis (R-Wyo.), one of Washington’s biggest crypto advocates.

“After a year of intense daily bipartisan negotiations, this bill is ready,” Lummis said in a Sept. 14 statement. “President Trump voluntarily agreed to unprecedented ethics restrictions, holding every federally elected official, judge, and their spouses to some of the toughest ethics restrictions in U.S. history.”

It might not be enough for one senator.

In a Sept. 13 video posted on X, Sen. Chris Van Hollen (D-Md.) stated that Congress “can’t let this pass.”

“This is a bill that is masquerading as a way to create good regulation and protection for consumers with respect to cryptocurrency, but it has some big problems that have not been fixed,” Van Hollen said.

Meanwhile, the latest draft includes a compromise on stablecoin yields. It instructs the Treasury Department to rein in reward payments if deposit flight from community banks occurs on a significant scale, triggering a “circuit breaker.”

A group of eight banking associations noted that while it might be a step in the right direction, the latest update “is not a safeguard at all.”

“The inclusion of a deposit-flight ‘circuit breaker’ is an acknowledgment that shifting deposits from regulated financial institutions into payment stablecoins can threaten credit availability and create broader economic consequences,” they wrote in a Sept. 14 letter.

“Further technical refinements are needed to ensure that the text clearly and directly prohibits interest-like payments on payment stablecoins.”

Technically, should the vote fail, lawmakers could revive the legislation in an amended form. But it is unclear whether they would have enough time to revise the bill and push it through before Congress adjourns.

In the end, the next vote will be the “first step” in a long process to pass the Clarity Act, says Sen. Bernie Moreno (R-Ohio).

“We have a long way to go on Clarity,” Moreno told reporters on the eve of the vote.

“That’s why, to me, it’s such an easy vote. I don’t think anybody should be concerned about a vote that says I decided to vote to end debate and consider this bill.”

Brace for Market Impact

Prediction markets are skeptical that the Clarity Act will pass.

As of Sept. 14, Polymarket indicates an 18 percent chance the bill will be signed into law this year.

“The crypto market is still positioned for it to fail, so the risk into Tuesday is to the topside,” Jesse Marre, senior portfolio manager at Hilbert Group, said in a note emailed to The Epoch Times.

“The Republicans have moved a long way towards what the Democrats were asking for and are calling this their last and final offer. What remains is whether this becomes a party political vote.”

Bitcoin prices have struggled to maintain momentum since they reached $80,000 last month for the first time since May. The chief cryptocurrency rose 1 percent to start the trading week, hovering around $78,000. Ether, the second-largest cryptocurrency, has also jumped about 1 percent to above $2,500.

This week’s outcome will prove to be the next catalyst for bitcoin.

“If forced to pick, the risk from this week’s events is to the topside, so the question is whether we get a breakout through $82,000,” Marre said. “Above $85,000, the market is probably back in bull territory and looking for $100,000.”