Senate Stalemate Leaves CLARITY Act Without a Floor Vote

The US House of Representatives approved the CLARITY Act in July 2025 with a 294-134 vote. Following that, the Senate Banking Committee advanced the legislation in May 2026 by a 15-9 margin, demonstrating bipartisan support for a digital asset market structure framework. However, the measure currently lacks a scheduled floor vote in the Senate, where it would require at least 60 votes to pass and overcome procedural hurdles.

The proposed bill aims to divide regulatory oversight between the SEC and the CFTC, specifically granting the CFTC authority over spot markets for digital commodities. This structural shift could place a significant portion of crypto assets outside the SEC's direct market jurisdiction. The jurisdictional question of whether a given digital asset functions as a security under SEC purview or a commodity under CFTC purview has been a central tension in US crypto regulation, and the CLARITY Act represents Congress's most comprehensive attempt to resolve it.

Several key points of contention have slowed negotiations and reduced the chance of passage before the August recess. Senate Democrats have raised concerns regarding ethics provisions tied to government officials and their digital asset activity. Furthermore, lawmakers remain fundamentally divided over whether stablecoins should be permitted to offer yield. They must also still reach consensus on how the final bill will treat decentralized networks, token sales, and customer protections. The legislation continues to face disagreements over illicit finance safeguards and consumer protection measures.

Senate Majority Leader John Thune indicated that the chamber would likely not complete work on the bill before the August state work period. The proposal was subsequently set aside as lawmakers turned their attention to other legislative priorities, leaving the bill without a clear date for a final vote. According to the prediction market Polymarket, the CLARITY Act currently holds a 29% chance of becoming law in 2026. This represents a 36% drop in probability as the Senate floor vote remains pending.

SEC Prepares Alternative Crypto Rules

The ongoing delay in passing the CLARITY Act could prompt the Securities and Exchange Commission (SEC) to advance its own digital asset market rules. SEC Chair Paul Atkins stated that the agency and the Commodity Futures Trading Commission (CFTC) could step in to address regulatory gaps if Congress fails to finalize the legislation this year.

Atkins emphasized that the SEC stands ready to establish rules covering many of the same issues targeted by the CLARITY Act. Utilizing its existing authority, the agency could implement regulations concerning token registration, custody, trading platforms, and broker-dealer requirements, while potentially creating exemptions for specific crypto projects.

The SEC has already placed a comprehensive crypto rulemaking package on its 2026 agenda. This proposed plan includes registration exemptions, a possible safe harbor for decentralized projects, updated custody standards, and regulatory frameworks for digital asset trading venues. Atkins described the agency's ongoing regulatory work as a temporary bridge to potential legislation, aimed at establishing clear standards for issuers, investors, and intermediaries. He argued that without these standards, uncertain jurisdiction can leave businesses without consistent compliance requirements.

However, Atkins maintained his strong support for a federal law, noting that comprehensive legislation would provide greater long-term certainty than agency rules, which are more vulnerable to being reversed by future administrations. Under US administrative law, agency rules can be rescinded or rewritten by a new commission, whereas statutes require an act of Congress to modify. Atkins confirmed that the SEC continues to support the bill and has actively offered technical assistance to lawmakers to help finalize the legislation.

Agency Guidance and Future Outlook

In the interim, the SEC and CFTC have continued their collaboration on digital asset classification. In March, joint guidance was issued identifying 16 specific tokens—including Bitcoin and Ethereum—as digital commodities. Nevertheless, this classification remains an administrative action rather than codified federal law, meaning it carries less permanence than statutory definitions the CLARITY Act would establish.

As Congress continues to debate the comprehensive legislation, the SEC is expected to proceed with preparations for its own crypto rules. These agency-level rules could provide shorter-term guidance for issuers and intermediaries operating in the market. Still, Chair Atkins maintains that passing comprehensive legislation through Congress remains the stronger and more durable route toward establishing a stable U.S. crypto market framework.