The U.S. Senate rejected the Digital Asset Market Clarity Act on Tuesday, with the bill receiving only 49 votes in support—11 short of the 60 needed to advance. The vote marked the end of months of negotiations over market structure legislation that the crypto industry had pursued as a priority.
The failure stemmed from last-minute disputes between Republican and Democratic negotiators over ethics requirements and stablecoin policy. Democrats insisted on stricter ethics constraints on President Trump's crypto holdings and involvement in policy decisions affecting the digital asset industry. Republicans, led by Senator Cynthia Lummis, argued they had made significant concessions, including agreements for ethics constraints, but that Democratic demands continued to expand.
Senator Mark Warner, a Democrat working on illicit-finance portions of the bill, stated: "The president should not be able to use the power and influence of his office to benefit his own crypto holdings while his administration makes decisions that could directly affect their value."
Democrats accused Republican leadership of ending negotiations prematurely. Senate Minority Leader Chuck Schumer said a bipartisan deal addressing ethics concerns remained on the table when "Republican leadership walked into the room, broke up the bipartisan discussion and said, 'No, we're done' and killed it."
Lummis countered that Democrats' final offer was substantively identical to earlier positions and accused them of "playing games" rather than negotiating in good faith.
Beyond ethics, stablecoin rewards programs emerged as a secondary point of contention. Some Republicans, including Senator Josh Hawley of Missouri, opposed provisions affecting stablecoin rewards that could compete with traditional bank deposit accounts.
The bill had previously cleared the House and passed the Senate Banking Committee, marking unprecedented progress for digital asset market structure legislation. Earlier delays included opposition from Coinbase CEO Brian Armstrong over the bill's stablecoin rewards treatment.
Some lawmakers indicated the effort may be revived during the lame duck session between the November election and winter holidays, though prospects remain uncertain. House committee leaders stated they would continue supporting digital asset framework legislation and work with federal regulators on developing rules through existing authorities in the interim.
