CLARITY Act Timeline: Key Milestones and Passage Outlook

The cryptocurrency sector and its investors are closely monitoring the progress of the United States CLARITY Act, which faces ongoing delays due to partisan disagreements and various industry objections.

This proposed legislation aims to fundamentally overhaul the regulatory landscape for cryptocurrencies, addressing critical issues such as which federal agency will have primary oversight and how rules will apply to decentralized finance, or DeFi, protocols.

At present, United States Senators are deeply engaged in negotiating the finer points of the bill, encountering substantial disagreements along the way. Democrats are pushing for a version that includes strong bipartisan elements, ethics safeguards, and explicit bans on government bailouts—proposals that Republicans have firmly opposed.

Even within the cryptocurrency industry, certain aspects of the bill have sparked controversy. For instance, Coinbase, America’s leading cryptocurrency exchange, has voiced strong reservations about provisions that would prohibit them from providing yields on stablecoins. Meanwhile, the influential US banking lobby argues that such yields pose risks to traditional bank deposits and could undermine overall financial stability.

The CLARITY Act has evolved through multiple revisions and stages. Below is a detailed examination of its journey thus far:

May 2025: CLARITY Act Debuts in Washington

On May 29, 2025, Representative French Hill, Chairman of the House Committee on Financial Services, officially introduced the CLARITY Act for the first time.

According to the committee’s statements, the primary objective was to implement precise and practical standards for participants in the digital asset markets, with a strong emphasis on safeguarding consumers while simultaneously encouraging technological innovation.

The committee highlighted several compelling reasons for the bill’s necessity, particularly noting that digital assets signify the evolution of financial innovation in the digital age and that the existing regulatory environment is actively hindering growth and potential advancements.

June-July 2025: Swift Passage in the House of Representatives

The House of Representatives demonstrated remarkable efficiency in handling the CLARITY Act. During June, the legislation progressed through detailed markup sessions in both the House Committees on Agriculture and Financial Services, securing a spot on the floor vote calendar by June 23.

Ultimately, on July 17, the House approved the bill with a decisive margin of 294 to 134 votes. The tally revealed robust Republican backing, as all 216 voting Republicans supported it, with none voting against and just four abstaining.

Bipartisan elements were present, albeit limited: 78 Democrats voted in favor, while 134 opposed it, and none abstained.

Following this approval, the bill advanced to the Senate, where deliberations have continued intensively.

July-September 2025: Senate Initiates Deliberations

The Senate wasted little time diving into the CLARITY Act. Just days later, on July 22, Republican leaders within the Senate Banking Committee unveiled an initial draft of the legislation.

This working draft aimed to draw sharp lines between digital asset securities and commodities, update the nation’s regulatory infrastructure, and solidify America’s position as the foremost hub for digital asset innovation worldwide.

Senate Banking Committee Chairman Tim Scott expressed confidence that the Senate could match the House’s pace, setting an ambitious target completion date of September 30, 2025.

October-December 2025: Senate Divisions Deepen Amid Government Shutdown

Democrats on the Senate Banking Committee, led by vocal crypto critic Senator Elizabeth Warren, raised serious objections to multiple elements of the draft.

Warren specifically criticized the proposed tax treatments, arguing in public remarks that they might grant cryptocurrencies an undue edge over conventional financial instruments. She further contended that these changes would complicate efforts to monitor crypto transactions potentially involved in illicit activities.

Senate Democrats also proposed their own regulatory approach for DeFi. Legal experts from Skadden Arps Slate Meagher & Flom observed that these suggestions intended to adapt pre-existing regulatory structures to accommodate crypto markets, reflecting a preference for modifying the current system over crafting an entirely new one tailored to digital assets.

This stance stood in stark contrast to the preferences of Republicans and the crypto sector, which advocated for a fresh, customized regulatory regime designed specifically for digital assets.

Progress stalled further when, on November 11, 2025, the Senate Agriculture Committee issued its own discussion draft of the CLARITY Act. This version indicated that debates persisted over whether the Commodity Futures Trading Commission (CFTC) or the Securities and Exchange Commission (SEC) should hold primary regulatory authority.

Compounding these challenges was a protracted federal government shutdown spanning from October 1 to November 12—the longest such event since a prior one during President Donald Trump’s initial term. It concluded only after a faction of Senate Democrats crossed party lines to join Republicans in approving temporary funding measures.

December 2025-January 2026: Markup Attempts and Rising Industry Frustration

In the fall, Senator Cynthia Lummis had forecasted that the comprehensive crypto regulatory framework would land on President Trump’s desk by the end of 2025. However, as the year wound down, that timeline appeared increasingly improbable.

On December 19, David Sacks, the White House’s point person on cryptocurrency and artificial intelligence matters, announced following discussions with key senators that a formal markup session was slated for January in the Senate Banking Committee.

Nevertheless, the anticipated Senate Banking Committee markup was deferred due to irreconcilable differences voiced by crypto industry advocates and traditional banking representatives.

Coinbase Chief Executive Officer Brian Armstrong publicly declared that his company could not endorse the bill in its current state, citing restrictions on interest-bearing stablecoins and the designation of the SEC as the dominant regulator for the sector.

This withdrawal reportedly frustrated White House officials, who were keen to finalize the regulatory framework without further hitches.

Prominent financial leaders echoed these sentiments; for example, Goldman Sachs CEO David Solomon noted that the legislation still required substantial refinements.

Despite these setbacks, legislative efforts persisted. The Senate Agriculture Committee confirmed plans for its markup session on January 27. During proceedings, Democratic members proposed amendments such as ethics rules prohibiting congressional members from trading cryptocurrencies and firm prohibitions against government bailouts for the industry.

These amendment votes fell short along strictly partisan lines, allowing the Republican majority to propel the bill forward to the full Senate for consideration.

February 2026: White House Summits and Strategic Political Negotiations

Executives from the crypto industry, elected officials, and banking leaders have ramped up high-stakes meetings at the White House and within congressional offices to bridge their divides. The Digital Chamber of Commerce reported that a February 3 gathering centered on resolving disputes over stablecoin yield offerings.

These dialogues have persisted. Most recently, a productive assembly included Ripple’s chief legal officer Stuart Alderoty and other executives, though no final agreement emerged.

Alderoty emphasized the enduring bipartisan drive for pragmatic crypto market structure laws, urging swift action before opportunities narrow.

Despite the momentum, consensus remains elusive. Prolonged delays have triggered approximately $1 billion in outflows from cryptocurrency funds, per CoinShares analytics. Certain analysts view these postponements optimistically, arguing they afford the industry leverage to negotiate superior conditions.

Market commentator Michaël van de Poppe remarked that passing the bill as originally drafted might have inflicted severe damage on markets. He noted that current alignments among stakeholders mirror the protracted but ultimately beneficial rollout of Europe’s Markets in Crypto-Assets (MiCA) framework.

Urgency mounts to enact the legislation prior to the midterm elections. Crypto advocacy groups have fortified their influence via substantial contributions to political action committees. Lawmakers from both major parties appear motivated to deliver crypto-friendly outcomes before the 2026 election season intensifies and PAC funding decisions solidify allegiances.

The cryptocurrency community’s robust alignment with Republicans carries risks, especially as the party’s public approval wanes. Midterms traditionally disadvantage the incumbent president’s party, potentially leaving crypto advocates navigating a scenario with a weakened president and a potentially less receptive Democratic congressional majority in just one year.

Ultimately, the CLARITY Act’s triumph may hinge on outpacing the political calendar in a high-stakes contest against time.