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Earlier this week, I shared that the CLARITY Act could be in jeopardy if the Senate doesn’t approve it before the August recess. The Act would establish a Congressionally approved regulatory framework for digital commodities and clarify the roles of the SEC and CFTC. Coindesk reported that the Senate has now shelved the bill. Here’s an excerpt:

Bottom line: Clarity isn’t likely to come up for voting before next week — the final days before the chamber’s summer break is set to start on August 8. The hotly debated market structure bill isn’t yet ready for a vote, anyway, as the parties continue to try to seek a compromise on a contentious provision that’s stood in the way of a deal: the ban against senior government officials, including President Donald Trump, backing crypto projects.

What does that mean for the legislation, and what happens if it dies? As you might expect, the SEC and CFTC likely will continue to fill the gaps, as implied by SEC Commissioner Hester Peirce’s statement last week. The article says:

Having significant disagreements at this stage could narrow the chances that Clarity can become law in 2026, potentially throwing the industry into some uncertainty over the timeline for U.S. regulations. If this legislation tanks, the next best avenues for regulatory legitimacy is the ongoing implementation of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act and the policy efforts at the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.

In the Senate, the best hope for the industry at this point may be get its own preliminary push into the cloture process just before the lawmakers scatter on their recess.

The House and Senate both return for a few weeks in September. But that’s the end of the available floor time. And after the November elections, Congress will enter its so-called lame duck session in which defeated and retiring lawmakers will be serving out their final weeks until the next session of Congress begins in January. Lame duck sessions sometimes produce legislation in what can be a chaotic period of desperate dealmaking, though they can also lock up with political paralysis.

The article also notes that even if the CLARITY Act passes in the Senate, it will have to go back to the House for another vote.

– Liz Dunshee