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The US Senate failed to advance the Digital Asset Market Clarity Act on Tuesday after the legislation fell short of the 60 votes required to clear a key procedural hurdle, dealing a major blow to the crypto industry’s push for comprehensive federal market structure legislation.
More than 40 senators voted against advancing the legislation, according to the Senate floor webcast’s unofficial tally. The vote was on invoking cloture on the motion to proceed, meaning lawmakers were deciding whether to begin debate rather than voting on final passage.
The failure leaves little time for lawmakers to revive the legislation before the November midterm elections and likely ends the Senate’s market structure push for 2026.
Crypto markets moved lower following the vote. Bitcoin slipped toward $76,000, Ether fell below $2,400, Solana dropped below $97 and XRP fell toward $1.31 as traders reacted to the collapse of one of the industry’s most closely watched legislative efforts.
The move extended a reversal that began Tuesday morning after optimism surrounding the bill had briefly pushed crypto markets higher at the start of the week.
Senate Republicans released a revised version of the Clarity Act on Sunday that they said incorporated 126 substantive changes requested by Democrats.
The changes included stricter ethics provisions, expanded enforcement powers for state attorneys general and revisions aimed at addressing banking industry concerns over stablecoin rewards.
The new draft initially raised hopes that lawmakers could break months of negotiations and secure enough Democratic support to advance the bill.
Bitcoin surged toward $80,000 on Monday, reaching roughly $79,600 as traders increased bets on a legislative breakthrough and the broader crypto market moved higher.
That optimism faded late Monday after Senate Democrats submitted a counterproposal seeking further changes.
Republicans rejected the proposal Tuesday morning. Senator Cynthia Lummis, one of the bill’s leading Republican negotiators, said Democrats had largely returned to positions held before the August recess despite concessions made by Republicans.
Democratic concerns centered on the bill’s ethics provisions and restrictions on state enforcement powers. Banking groups also continued to oppose parts of the legislation dealing with stablecoin rewards.
The political uncertainty had already pushed Bitcoin below $77,000 before the vote, erasing much of Monday’s rally. The failed procedural vote added further pressure across the market.
The selloff also comes against a weaker macro backdrop, with US equities declining and Treasury yields moving higher ahead of Wednesday’s Federal Reserve decision.
Markets are pricing a high probability of a quarter point rate increase, adding another
The combination of a failed Clarity Act vote, rising yields and expectations for tighter monetary policy has quickly reversed the bullish setup that pushed Bitcoin toward $80,000 only a day earlier.
With the Senate effort now stalled, the crypto industry faces another period without a comprehensive federal framework governing digital asset markets, with attention likely shifting to whether negotiations can resume after the midterm elections.
Source: cryptonews.net