The Senate will leave Washington in two weeks, creating a narrow window for lawmakers to move the Clarity Act forward before the summer recess begins.
Senators have released a revised version of the Clarity Act that combines separate drafts from the Senate Banking and Agriculture Committees and introduces, for the first time, a framework for an ethics provision. However, the legislation is still not at the final stage.
The latest draft of the Digital Asset Market Clarity Act merges the two committee versions and includes an ethics measure aimed at preventing senior government officials from launching or promoting their own cryptocurrencies, a response tied to President Donald Trump’s crypto activities.
The key question now is whether lawmakers can complete the process before time runs out. While the release of new legislative language represents progress, uncertainty over whether both parties can agree on the ethics provision has made the timeline increasingly difficult.
The central issue remains whether the Clarity Act can pass. Despite the updated text and inclusion of an ethics section, the broader political disagreements surrounding the bill appear largely unchanged.
Although the legislation would significantly reshape federal oversight of digital assets and define regulatory responsibilities, the biggest remaining obstacle is not directly related to crypto market rules.
Democrats are pushing for a stricter ethics provision that would have a greater impact on Trump and the estimated $1.4 billion he earned from crypto-related activities last year. Republicans and the Trump administration oppose measures they believe would specifically target the president.
The current ethics language, which has White House support but lacks approval from Senate Democrats, would give Trump one year to sell certain interests or place his businesses into a blind trust. It would also require the Department of Justice to enforce the rules. Democrats argue they do not trust the DOJ to pursue action against a sitting president and object to provisions that expire when the next administration begins.
The proposal would also prevent future administrations from taking retroactive action against Trump and allow continued benefits from existing tokens connected to his name through a name, image, and likeness provision.
Supporters of the measure, including Senator Cynthia Lummis, argue that the ethics rules apply broadly to government officials and federal judges rather than only the president. White House adviser Patrick Witt and several crypto industry participants have described it as one of the strongest ethics commitments ever accepted by a U.S. president.
However, with midterm elections approaching, Democrats view Trump’s crypto earnings as a politically significant issue. The election will determine control of Congress next year, increasing pressure around the debate. Lummis said negotiations over the ethics language and other parts of the bill would continue. Some Republicans have also raised concerns about the legislation, according to Punchbowl News.
Many industry participants believe there is still enough time to pass the bill before the August recess. Senate staffers from both parties, crypto companies, and other stakeholders generally support moving the legislation forward, although some lawmakers remain opposed. Senator Elizabeth Warren, the top Democrat on the Senate Banking Committee, has argued that the bill should not advance, citing concerns over investor protection, national security, and Trump’s crypto connections.
The crypto industry continues to advocate for passage, arguing that the bill would establish clearer rules and introduce investor protections. Industry supporters say failing to pass the legislation would leave the market without a regulatory framework.
To meet the Senate’s deadline, lawmakers would likely need to begin the formal process with a motion to proceed early in the week. If that motion is filed by Wednesday, the Senate could still have enough time to vote before the August 7 end of the session.
Once the motion advances, lawmakers could hold a cloture vote on the substitute amendment containing the updated bill language. If approved, another cloture vote could follow before final passage.
Kristin Smith, president of the Solana Policy Institute, said recess deadlines can create strong incentives for lawmakers to reach agreements.
Industry sources expect the motion to proceed could happen Monday or Tuesday, with a possible Senate vote later in the following week.
A successful 60-vote motion to proceed would indicate that lawmakers believe they are close to resolving outstanding issues. However, it would not guarantee that the later cloture votes needed for final approval would also receive enough support.
The most likely timing for the final cloture votes is expected to be during the final week before the August recess, beginning August 3.
For the current schedule to succeed, lawmakers may need to reach an agreement on the ethics provision by July 30, according to people familiar with the negotiations.
The Senate’s crowded agenda also presents another challenge. Beyond the Clarity Act, lawmakers must address nominations, including Jay Clayton’s nomination as Director of National Intelligence, a Russia-Iran sanctions package, and other time-sensitive legislation.
There are currently no major committee or agency hearings related to the bill scheduled for this week, leaving negotiations and Senate procedure as the main focus.
