The CLARITY Act, market structure legislation designed to establish a regulatory framework for cryptocurrency in America, failed to advance on Tuesday after a 49-50 procedural vote in the U.S. Senate.
The bill (H.R. 3633) would clearly allocate jurisdiction between the SEC and CFTC, drawing a line between digital asset securities and digital asset commodities. It also would establish protections for digital asset market participants and equip law enforcement with the tools to prevent the illicit use of digital assets.
Every Democratic senator voted not to advance the bill. U.S. Sen. Elizabeth Warren (D-MA), ranking member of the Senate Banking, Housing, and Urban Affairs Committee, raised ethics concerns in the bill.
“We need crypto regulation, yes we do—but not a crypto bill written by the crypto industry to benefit only the most extreme voices in the crypto industry—at the expense of our national security, our economic stability, and to help the most corrupt President in the history of the United States make himself even richer,” Warren said in remarks ahead of the CLARITY Act procedural vote.
Four Republicans joined Democrats in opposing the bill, including Sens. Josh Hawley (R-MO), Thom Tillis (R-NC), Susan Collins (R-ME), and Jerry Morgan (R-KS).
“Today, nearly all Senate Republicans voted to advance the Clarity Act, but the motion fell short because of Senate Democrats. We moved the ball forward, and now it’s time for the SEC and CFTC to set clear rules of the road for digital assets until Congress legislates,” Senate Banking Committee Chairman Sen. Tim Scott (R-SC) said.
The chairman of the House Committee on Financial Services, Rep. French Hill (R-AR) and the chair of the House Agriculture Committee Glenn Thompson (R-PA) said they are committed to working with their Senate colleagues on the bill.
“Today’s vote does not change the need for Congress to enact clear rules of the road for the digital asset ecosystem. Only Congress can provide the lasting legal certainty that consumers and businesses need to participate in these markets with confidence and necessary protections,” Hill and Thompson said. “The House has worked across multiple Congresses to establish a functional digital asset market structure framework for the digital asset ecosystem. Until statutory certainty is achieved, we look forward to partnering with the federal financial regulators as they utilize existing authorities to develop rules and issue guidance governing digital assets.”
The bill is not formally dead, and lawmakers could revisit negotiations later in the session.
“We will continue to engage with Republicans and Democrats in both chambers. As it stands, a motion to reconsider was entered, which preserves a path for the Senate to revisit the vote. We intend to keep our members mobilized,” Blockchain Association CEO Summer Mersinger said.
Banking associations including the Independent Community Bankers of America, the American Bankers Association, Bank Policy Institute, and Consumer Bankers Association, among others, said they continue to support a durable framework for digital assets.
“We believe Congress can accomplish that goal while protecting the bank lending that drives economic growth. As lawmakers consider next steps, we encourage them to adopt targeted changes to stablecoin yield policy. We stand ready to work with all stakeholders to achieve this important goal,” the groups said in a joint statement.