This bill could reshape crypto in America –

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This bill could reshape crypto in America — and it’s sparking a major battle

The Clarity Act would set a regulatory framework for the crypto sector for the first time in the U.S. But whether it can clear a key procedural hurdle in the Senate remains uncertain.
Karen Bleier/AFP

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Karen Bleier/AFP

It could be a game changer for the cryptocurrency industry. That is, if it can survive fierce opposition and actually become law.

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On Tuesday, the Senate will hold a key procedural vote on the Clarity Act — officially called the Digital Asset Market Clarity Act — which has been at the top of the crypto sector’s wish list for years.

The massive bill — which stretches over 600 pages — would establish the first regulations for the crypto sector in U.S. history.

But opponents see this as the industry’s attempt to encode into law a set of rules that are far too lenient on the industry, without enough safeguards.

A version of the bill already passed the House last year, but it has faced a long and torturous road in the Senate as opponents have fought tooth and nail.

Here’s 5 key things to know about the Clarity Act — and why opponents are fighting so hard to prevent it from ever being passed.

What’s in it?

Just like with most things dealing with crypto, the details are complicated and a bit geeky. But it effectively establishes a clear legislative framework for the crypto sector for the first time in U.S. history.

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That would mark a sea change from today, where crypto regulation can change depending on who controls the White House. Under President Biden, for example, the Securities and Exchange Commission took an aggressive approach against the crypto sector. But that changed radically under President Trump with the agency now led by Paul Atkins, a former adviser to the industry.

“Tens of millions of Americans are investing in products that don’t have clear regulatory oversight,” said Ryan VanGrack, vice chair of Coinbase, a major crypto firm. “That’s an abomination.”

“Whether you love crypto or you hate crypto, you should want it regulated,” he added. “And this is the best opportunity we have ever had to do just that.”

The crypto sector has also grown beyond Bitcoin to include all kinds of cryptocurrencies – such as meme coins. Meanwhile, the technology underpinning Bitcoin and some other cryptocurrencies are also starting to be adopted by the broader financial sector.

The Clarity Act would formally split oversight of the crypto sector between the SEC and the Commodity Futures Trading Commission. But — controversially— it would give the CFTC, a far smaller regulator, the majority of control.

Critics say handing the CFTC the bulk of the reins is the crypto sector’s way to avoid heavy regulatory scrutiny. Crypto industry executives deny that’s the case, and Trump administration regulators have defended their oversight of the industry.

SEC Chair Paul Atkins (left) and CFTC Chair Michael Selig (right) look on during a White House crypto and technology event on Aug. 19, 2026. The Clarity Act would formally split oversight of the crypto sector across the two agencies, although the CFTC could play a larger regulatory role.
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Alex Wong/ North America

What’s at stake for Tuesday’s vote?

It’s effectively a vote to decide if the bill gets to move forward at all. The Senate would need 60 “yes” votes to clear that hurdle — meaning all 53 Republicans would have to back it, along with seven Democrats or Independents.

That’s far from guaranteed. The bill still faces significant opposition, and Tuesday’s procedural vote is its most critical test to date. If it does advance, the Senate can move ahead with debate, and, eventually, a final vote.

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Even if the billpasses the Senate, though, it would not go straight to President Trump. Because senators have changed the bill since it passed the House last year, both chambers would still have to agree on a final version.

But it’s unclear how soon that might happen, with a busy agenda in Congress — and midterm elections coming up fast in early November.

The crypto sector had been hoping to pass the Clarity Act much sooner — and have amassed tens of millions to spend on the upcoming elections. But money hasn’t been enough to erase the disagreements that have dogged the bill for months.

Why are Democrats pushing back?

For Democrats, a key sticking point is an ethics clause intended to prevent presidents and other elected officials from profiting from the crypto industry while in office. Democrats, including Massachusetts Sen. Elizabeth Warren, have argued the clause doesn’t do enough to prevent conflicts of interest.

Notably, the Department of Justice would be tasked with enforcing the ethics clause, which Democrats strongly object to since they don’t believe the agency would provide a meaningful check on a sitting president. The DOJ is currently led by Todd Blanche, who used to be Trump’s attorney.

Those concerns intensified after President Trump disclosed he and his family had earned $1.4 billion last year from his crypto ventures — an unprecedented sum for a sitting president.

Republicans are now trying to break the impasse.

Under the new language unveiled by Republicans, federally elected officials and their spouses would not be allowed to issue their own cryptocurrencies. That could effectively prevent Trump from continuing $TRUMP, a meme coin he launched early last year— a point Trump agreed to abide by.

Officials would also have to divest “significant” financial stakes in the crypto sector, a provision that could affect some of Trump’s crypto business interests — though critics say the language is loose enough to allow the president to avoid it altogether.

The new language would also give state attorney generals more ability to bring lawsuits if they suspect a breach of ethics rules.

Brian Armstrong, the CEO of major crypto company Coinbase, speaks as President Trump looks on during a summit of crypto and technology leaders at the White House in Washington, D.C., on Aug. 19, 2026.
Alex Wong/ North Americahide caption

Are others opposing the Clarity Act? 

Yes. Many people in the banking sector— especially community bank leaders — are against it.

One of the main disputes involves a segment of the crypto market called stablecoins. The bill would offer financial rewards such as interest payments to customers who place their money with these crypto companies.

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Banks argue those incentives allow crypto companies to compete for customers’ money without being subject to the same regulations as traditional banks.

Crypto companies have disputed that characterization and argue these incentives are similar to what many credit card companies offer, such as cash backs or points.

Community bankers have been especially vocal. They say allowing crypto companies to offer these types of incentives would pose a direct threat to their business and lead them to lose customers.

Rebeca Romero Rainey, president and CEO of the Independent Community Bankers of America, says keeping their customers’ money with local banks is critical because it allows them to provide small business and agricultural loans to members of their communities.

“If community banks aren’t there, and those local deposits aren’t there to fund it, who’s going to fund those small businesses and ranchers and farmers?” she said. “I don’t think it’s going to be the crypto industry.”

So what are the odds of passage?

It’s impossible to say whether Republicans have the votes to survive Tuesday’s hurdle — or whether they would need to try again at a later date.

The vote is a priority for Trump, who has strongly supported the crypto industry. Senate Majority Leader John Thune (R-S.D.) set up Tuesday’s vote before the Senate took a break for recess even though the outcome remained uncertain.

But the Clarity Act has faced so many twists and turns that even if it survives beyond Tuesday, the path ahead remains uncertain.

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