Clarity Act Faces Senate Risk as Crypto Pressure Mounts
- Senate delays now threaten Clarity as cryptocurrency firms seek durable federal rules.
- Stablecoin disputes keep slowing progress and dim hopes for quick Senate action.
- Industry leaders warn policy drift could send capital and builders to rival hubs.
The Clarity Act now faces a critical stretch in the US Senate as midterm politics cloud its path. Industry figures say failure could deepen regulatory uncertainty and weaken America’s role in crypto. Several executives said that a stalled bill could keep firms in a legal gray zone. They also warned that capital and infrastructure could drift to markets with clearer rules.
What happens if the Senate lets the Clarity Act stall as election season takes over?
For now, the bill’s outlook remains mixed. Coinbase’s legal chief sees movement ahead, while other analysts place the odds far lower as disputes over stablecoin rules continue.
Senate Calendar Tightens Around Crypto Bill
The Senate now holds the next major decision point for the Clarity Act. A Coinbase official recently said the bill could reach the Senate Banking Committee in the coming weeks. Paul Grewal, Coinbase’s chief legal officer, told Fox Business that lawmakers and stakeholders were “very close to a deal.” He also said he was “very confident” that progress would come soon.
That timeline slipped. Grewal had suggested a deal could arrive within 48 hours, yet that window passed without an agreement. Even so, he still pointed to a markup hearing and, later, a floor vote.
At the same time, TD Cowen analyst Jaret Seiberg struck a more cautious tone. Last week, he said his firm had grown “increasingly pessimistic” that Clarity would pass before Washington shifts toward November’s midterms.
Seiberg put the odds of Senate passage at no better than one in three. More specifically, he said the chance of the Senate passing a version the House would support remained limited.
Earlier this year, Ripple chief executive Brad Garlinghouse gave the bill an 80% chance of becoming law. Since then, confidence appears to have weakened across parts of the market.
Stablecoin Dispute Slows Momentum
A dispute over stablecoin rules now sits near the center of the delay. That impasse has slowed hopes for quick movement, even as some lawmakers and industry participants continue talking. Grewal pushed back on claims from the banking sector about stablecoin yields. He said the argument that rewards on stablecoins would trigger mass deposit flight remained theoretical.
He told Fox Business there was “no evidence … whatsoever” that bank customers would rush to move savings into crypto platforms for higher returns. In turn, that issue has become a flashpoint in the debate.
If the bill fails, some executives expect the current enforcement model to remain in place. Pierre Person, chief executive of Steady Labs, told DL News that failure would leave “enforcement-by-litigation” as US crypto policy.
Person said the Securities and Exchange Commission and the Commodity Futures Trading Commission would keep fighting over jurisdiction. As a result, firms would continue operating in a gray zone.
He added that a missing framework could push operators abroad. In his view, offshore issuers would gain against US-domiciled rivals, even if the broader market opportunity shrinks.
Related: CLARITY Act Faces Hurdle as Coinbase Rejects Yield Compromise
Global Rivals Watch Washington Closely
Outside the US, other regulatory systems already stand in place. The person pointed to the European Union’s MiCA regime, along with frameworks in Singapore and the United Arab Emirates.
He said capital moves toward clarity. That is why some industry leaders see the Senate debate as more than a domestic policy fight. Stephan Lutz, chief executive of BitMEX, told DL News that the world still looks to the US for a blueprint. He warned that a failed bill could prompt other countries to shape their own paths.
Lutz said the US market would likely remain “resilient but isolated” if the bill fails. In his view, the deeper risk lies in a wider separation between the US and global crypto markets. Markus Levin, co-founder of XYO, delivered a similar warning to DL News. He said capital and builders would increasingly move to more predictable environments if lawmakers do not deliver a framework.
Over time, Levin said, more of the industry’s underlying infrastructure would grow outside the US. That warning landed as Polymarket odds for passage before year-end fell to 63%. The stakes come into sharper focus as crypto firms keep expanding products. This week, Circle said it plans to launch cirBTC, a wrapped Bitcoin product for institutions, while the Senate debate remains unresolved.
