coindesk.com
At some point, the progress of the crypto sector's top policy priority — the Digital Asset Market Clarity Act — becomes an insurmountable math problem, with not enough time left in the U.S. Senate's work calendar to allow for passage. But the bill has now been formally offered for the Senate calendar, and the industry's lobbyists are still shooting for a last-moment win.
There are about eight weeks of floor time available in the Senate before the lawmakers scatter for the summer break and the political demands of the midterm congressional elections. And as the election season grows more urgent, the appetite for legislative cooperation could also take a hit.
In that brief work window in Congress' upper chamber, the Clarity Act would need to go through several procedural steps that can only begin once the market structure bill is finalized — a goal that still requires some big-ticket disputes to get ironed out between the political parties and the White House.
The Clarity Act would establish a tailored regulatory regime for crypto in the U.S. — an idea that carries significant bipartisan support. But even if the bill were ready for action, a significant array of Senate business items are competing for time and attention. And some of them haven't been going very well.
A deadline is looming this month for extending the Foreign Intelligence Surveillance Act (FISA), and getting a long-term deal on U.S. spy powers has been a challenge, including over the insertion of a ban on central bank digital currencies (CBDCs). Senate leadership had warned that the CBDC component could kill the effort in that chamber, and an impasse had set in between the House of Representatives and Senate that's still being resolved, but the latest version of the bill reportedly includes a temporary ban that ends in three years.
Even more fireworks, though, had erupted from the process to approve an immigration-enforcement funding bill. The spending plan was derailed by an internal outcry from Republicans opposing President Donald Trump's $1.8 billion Department of Justice "anti-weaponization" fund to compensate allies. A court ordered the plan halted during the dispute over its legality, and Acting Attorney General Todd Blanche reportedly gave in to the pressure on Tuesday to assure lawmakers that the idea is dead, which is expected to re-open the path for the immigration bill.
Must-pass bills
Those two bills — FISA and immigration — must pass in order for aspects of the federal government to continue functioning, giving them priority over other work. Crypto lobbyists are expressing quiet confidence that they'll be resolved soon.
But once they're approved, that doesn't necessarily mean smooth sailing for the crypto bill, which was formally forwarded to the Senate calendar this week.
Adding some potential drama has been President Trump's insistence that one of the legislative efforts — FISA or a bill overhauling U.S. housing regulations — be saddled with his effort to impose voter identification and proof of citizenship at the polls before the congressional midterm elections, which he has said will lead to his impeachment if Democrats win. Adding that controversial bill atop another would sharply decrease the odds of its host bill's passage, but Trump has previously threatened to halt congressional progress on other matters if lawmakers don't make it happen.
That housing bill he's looking at may be among the Clarity Act's big competitors for floor time. The bipartisan legislation to encourage U.S. home building (while also restricting certain institutional investors) has been lobbed back and forth by the House and Senate, but leaders in the two chambers are reportedly working on a version that will satisfy both. Even if it all goes well, the Senate calendar is a zero-sum proposition at this stage, meaning every hour devoted to anything that isn't Clarity reduces the odds for the chamber having enough bandwidth for the bill.
The Senate is also wrestling with a debate over a war-powers resolution aimed at halting U.S. military action in Iran. And the coming days are also expected to see action on the legislation known as the farm bill that may get a hearing in the Senate Agriculture Committee that's also supposed to be working on a final version of the Clarity Act, plus potential movement on the National Defense Authorization Act for next year.
Summer plans
Though White House officials had expressed an Independence Day goal for the Clarity Act to clear Congress at the start of next month, various lawmakers have suggested end-of-July timing or even early August — the final week before the start of the long congressional break.
"Under my Leadership, we will codify a FUTURE-PROOF Digital Asset Market Structure that cannot be undone by the Crypto Haters," the president wrote in a recent post on his social-media site. "The new Frontier of Finance is being Built in America, and 'TRUMP' will NEVER let Crypto down!"
His codifying promise may be dependent on what Trump is willing to allow into the Clarity Act involving an ethics provision aimed straight at him: banning government officials from personal stakes in the crypto industry. A bill without such limits is widely considered to be a dealbreaker for Senate Democrats, but crypto insiders are suggesting that a runway period has been raised that may not force Trump to divest from his own interests.
The Clarity Act recently cleared the Senate Banking Committee in a narrow bipartisan vote that drew loud fanfare from the industry. But a party-line approval of a parallel version in the Senate Agriculture Committee is now being litigated on certain points to bring that committee's Democrats on board, including the potential requirement that the Commodity Futures Trading Commission — a leading regulator of crypto activity — get nominations from the White House to fill all four of its commissioner vacancies (two Republicans and two Democrats).
Ongoing fights
Lobbyists from the banking industry are also expected to keep hammering away at the bill, which includes a section on stablecoin yield that bankers see as a threat to their deposit base. And the decentralized finance (DeFi) interests are still trying to acquire more legal shielding for developers who don't want to be punished for illicit usage of their work.
So the bill isn't done, and crypto advocates in Washington say it hasn't leapt into June with a particularly quick start. Once the legislation is finished, including combining the versions from the banking and agriculture panels and adding an ethics provision, Senate leadership would need to set up some floor time — potentially a full week (one of the precious eight remaining before the August recess).
If not by then, there's another smidge of time in September, and then comes the biggest wild card of the congressional calendar: the so-called "lame duck" session in which the members of this Congress will keep working for about four weeks after the elections have effectively fired some of the lawmakers and others are retiring. Desperate deals have been made for significant legislation during those sessions, but the odds are long.
Senator Cynthia Lummis, who chairs the digital assets subcommittee on the Senate banking panel, has been posting a steady stream of encouragement for pushing the Clarity Act.
"We are closer to a functioning digital asset market structure than we have ever been," Lummis posted Tuesday on social media site X. "Now is not the time to flinch."
Read More: Clarity Act clears U.S. Senate committee, on its way to a final test in Congress