Crypto's Clarity Act is a Schrödinger's cat in life-death limbo as U.S. Senate returns

Depending on who you hear from, the Digital Asset Market Clarity Act has a real shot at a last-second deal that will catapult it into law. Or no shot at all.

It might also reemerge inside another bill. Or be shunted aside for years in legislative purgatory.

The crypto industry is awash in Clarity Act theory, but the truth seems to hew close to a legislative shrug at this stage. For a sector that has so much on the line, the frustration can be palpable in a process that seems to be neither entirely dead nor alive, akin to the thought exercise of Schrödinger's cat.

Much of the conjecture hinges on the potential September 15 vote that was set up in the final moments before the Senate dispersed for its August break. But the Senate is not an entity easily nailed down to strict timetables, so the certainty of the vote meant to establish whether Clarity can beat the 60-vote threshold necessary for Senate passage is not necessarily in stone.

To be sure, the fact that the bill has dragged into the final do-or-die weeks of the session is not a good sign. The more time that goes by, the lower the odds of a crypto law emerging. But the Senate is a land of last-minute negotiation, and the emergence of the latest draft last week was the Republican side's marker for where they stand in the talks, representing a number of compromise positions already negotiated with Democrats.

"We are optimistic heading into Tuesday’s vote and deeply grateful to the senators in both parties who have stayed at the table and worked through difficult issues in good faith," Blockchain Association CEO Summer Mersinger said in a statement to CoinDesk. "This is a defining moment for the next generation of financial innovation."

However, the Democrats had previously insisted that an ethics approach that could significantly curtail President Donald Trump's crypto involvement is needed before they'll make up the current vote shortfall. They've argued that the restrictions that Trump already agreed to (and that would mark the first of their kind for a sitting president) would be easily sidestepped. A handful of Republicans have also expressed opposition to the bill, citing concerns about how a stablecoin yield provision might affect community banks.

However, the chief of the Securities and Exchange Commission has repeatedly made clear that such rules won't make up for the absence of a new law, which would give the effort greater permanence.

Read More: New Clarity Act text tweaks DeFi, credit union provisions, but road ahead for bill remains murky