The U.S. Senate has shelved the Digital Asset Market Clarity Act, commonly known as the CLARITY Act, until at least September after running out of floor time before the August 8 recess. The delay has pushed Polymarket odds of the bill becoming law in 2026 down to roughly 30 percent, dealing a significant blow to the crypto industry’s most important regulatory priority.
Senate Majority Leader John Thune chose to prioritize federal nominations and a Russia sanctions package over the crypto market structure bill, leaving no procedural room for a floor vote before lawmakers left Washington. The bill itself has not been withdrawn, but the compressed legislative calendar makes passage this year an increasingly unlikely prospect. Congress is scheduled to return for only a few weeks in September before midterm elections dominate the fall session.
The CLARITY Act proposes to divide regulatory oversight of digital assets between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Tokens classified as digital commodities would fall under CFTC supervision, reducing the compliance burden that has pushed issuance and trading activity offshore. A grandfather clause would treat tokens tied to spot ETFs listed before January 1, 2026, including XRP, Solana, Litecoin, and Dogecoin, as commodities by default.
New projects would be allowed to raise up to $75 million annually without full SEC registration, subject to disclosure requirements. JPMorgan analyst Nikolaos Panigirtzoglou said that provision alone could revive onshore venture activity that has steadily migrated abroad. The bill passed the Senate Banking Committee 15-9 in May, but the 60-vote filibuster threshold has remained out of reach.
The sticking point has been ethics provisions that would restrict government officials from investing in crypto projects while holding office. Seven Democratic negotiating partners have formally rejected the updated text, arguing that routing ethics enforcement through the Department of Justice rather than the SEC or CFTC does not adequately constrain President Trump’s approximately $1.4 billion in crypto holdings. Treasury Secretary Scott Bessent had called the bill at the “1-yard line” as recently as July 21.
JPMorgan warned that delays could lead to tokenization and blockchain applications being absorbed by traditional market infrastructures instead of benefiting public crypto networks. On July 15, the DTCC announced a pilot to tokenize stocks and U.S. Treasuries, involving major firms including JPMorgan and Vanguard. Galaxy Research had estimated passage odds at roughly 50-50 before the latest shelving.
The crypto market has largely priced in the delay. Bitcoin traded near $64,650 as of late July, stuck in the $60,000 to $65,000 range it has occupied for months. Analysts say the broader market impact has been muted because institutional investors had already reduced expectations for a 2026 passage following repeated delays throughout the year.
Sources: Yahoo Finance, Solana Compass, DEXTools
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