The U.S. Senate will hold a key procedural vote on “Clarity Act” on Tuesday. This bill aims to establish a new regulatory framework for cryptocurrencies and other digital assets, but it is still uncertain whether it will receive sufficient support at this time.
The 60-vote threshold still needs to be overcome.
This bill has been in the Senate for several months, and since its passage by the Senate Banking Committee in May, it has not been able to move on to the next stage. Since the Senate requires 60 votes to end a filibuster, at least 7 Democratic senators need to switch their support for the bill to proceed with it, given that all members are present.
The Republican side has recently updated the bill text in an attempt to gain more moderate votes. Senator Cynthia Lummis stated that the new version incorporates the discussions from both parties over the past year. Supporters hope to first pass a procedural vote to move the bill forward, and then make modifications to the details at subsequent stages.
Ethical guidelines become a focus for the Democratic Party
The main objections within the Democratic Party focus on the possibility that Trump and his family could profit from the crypto industry. Some Democratic lawmakers believe that they cannot support the bill if it does not include stronger ethical constraints.
A revised version released by the Republican Party on Sunday evening stated that it had incorporated some ethical provisions agreed upon through bipartisan negotiations, including allowing state attorneys general to enforce relevant ethical requirements for federal officials. This is seen as one of the key concessions made in an effort to gain Democratic support.
A Democratic aide familiar with the negotiations said that some Democrats might support allowing the bill to proceed for now, as this vote is not the final decision, and amendments can still be proposed later on. It has also been reported that the White House has hinted that if the procedural vote passes, they may continue to make concessions on issues such as ethical provisions.
The banking industry opposes the revenue design of stablecoins.
In addition to party disagreements, the banking industry has also continued to exert pressure regarding the stablecoin provisions in the bill. Groups such as community banks and the Bankers Association of America are concerned that if stablecoins can offer returns similar to deposit interest, funds may flow out of the traditional banking system.
- The bill needs to secure the support of at least 7 Democratic members of Congress.
- Nearly 80 banking groups have jointly written a letter to the Senate
- The Ministry of Finance may impose restrictions on stablecoin rewards during times of outflow of deposits.
The latest version includes a compromise arrangement: if community banks experience large-scale loss of deposits, the Minister of Finance will be required to limit the stablecoin incentive mechanism. However, based on the statements from the banking industry, this modification has not completely alleviated concerns.
The crypto industry continues to lobby
The crypto industry continues to publicly support the bill. Coinbase CEO Brian Armstrong recently stated that the Senate now has the conditions to advance this bill. The White House also argues that Congress should pass the Clarity Act to maintain America's competitiveness in the field of digital asset innovation.
However, the opposition voices have not disappeared. If the procedural vote fails on Tuesday, the bill could theoretically be reintroduced after revision, but whether there will be enough time within the current congressional term to complete the subsequent legislative process remains a practical issue.
