The CLARITY Act is heading toward a critical Senate vote with diminishing prospects for passage. Polymarket odds of enactment fell below 20% on Tuesday, down from about 34% the previous day, as the bill's path to securing the 60 votes required for Senate advancement narrowed significantly.
The Senate was expected to vote Tuesday afternoon on whether to proceed with the bill. Republicans hold 53 seats but cannot advance the legislation alone, requiring support from at least seven Democrats to reach the 60-vote threshold. However, several Republican senators have not committed to the measure, including Sen. Susan Collins, who has raised concerns that the bill could accelerate deposit flight from community banks, and Sen. John Cornyn.
Sen. John Curtis has indicated he would support opening debate but has distinguished that position from backing the final legislation, stating the current text would not win his vote on passage.
Democratic demands complicate negotiations
Senate Democrats delivered a counterproposal to Republican negotiators Monday night, signaling dissatisfaction with the GOP's latest package. Sen. Mark Warner stated that Democrats who participated in negotiations concluded that Republican proposals still fell short, particularly on ethics restrictions.
Republicans had offered tougher rules governing financial conflicts involving senior government officials over the weekend, changes intended to address Democratic concerns about President Donald Trump's crypto interests. Sen. Cynthia Lummis responded to the Democratic counterproposal by stating that Republicans had agreed to ethics provisions Democrats had previously demanded.
Industry advocates push for compromise
Crypto industry executives are now urging wavering senators to vote yes, arguing that substantial compromises have already been made. Coinbase Chief Policy Officer Faryar Shirzad said the CLARITY Act addresses seven principles Democratic senators outlined a year ago for acceptable crypto market-structure legislation, including regulatory jurisdiction, issuer oversight, illicit finance, conflicts of interest and consumer protection. Shirzad noted that negotiators incorporated 126 additional substantive changes requested by Democrats.
Ripple Chief Executive Brad Garlinghouse made a similar appeal, stating that lawmakers had made meaningful compromises on difficult provisions and cautioning that perfect can't be the enemy of good.
Broader coalition strain
The bill has grown to more than 600 pages after successive rounds of negotiations. Democrats remain dissatisfied with the ethics package, banking groups are pressing Republicans over stablecoin competition and deposits, and some GOP senators are still studying the legislation.
Political pressure is also spreading beyond the Senate. Some House Democrats who backed crypto legislation earlier in Congress are concerned that major industry-backed super PACs may not support them in upcoming elections despite their votes.
A successful procedural vote would move disputes to the Senate floor, where lawmakers could spend the remainder of September debating amendments, ethics provisions and banking issues before a final vote. A defeat, according to Lummis, could have broader consequences for the industry and American competitiveness.
