The push to pass the CLARITY Act hit a significant roadblock this week as the Senate failed to advance the bill before the August recess, largely due to unresolved disagreements over stablecoin yield provisions. Banking groups have pressed lawmakers to restrict arrangements that could let crypto platforms offer returns resembling interest on deposits, a stance that gained traction among some Republican senators and complicated vote arithmetic.
In a parallel political maneuver, Senators Cynthia Lummis and Bernie Moreno moved on August 7 to cosponsor the Credit Card Competition Act (S.3623), a bill fiercely opposed by the banking industry. The American Bankers Association has warned that the measure could undermine card rewards and increase fraud risks. Their entry into that fight comes as banks are also the main opponents of CLARITY, creating a wider confrontation between crypto‑friendly lawmakers and traditional finance.
Lummis expressed public frustration over the CLARITY setback, vowing to keep fighting for the legislation. Majority Leader John Thune still intends to file cloture on the motion to proceed before the recess, teeing up a possible vote in September. However, the banking lobby’s resistance and the need for bipartisan agreement on ethics language leave the bill’s fate uncertain.
Meanwhile, the FTX collapse offers a stark argument for the bill. The exchange’s CFTC‑regulated U.S. derivatives platform remained solvent and was eventually sold, returning value to creditors—while its unregulated offshore entities became the epicenter of fraud. Bullish’s Randi Abernethy and others argue that the CLARITY Act would extend such legal protections across the entire digital asset market, replacing enforcement actions with clear jurisdictional lines. The Senate’s inaction keeps the bulk of crypto activity governed by ambiguity and enforcement rather than statute.
