U.S. Cryptocurrency Legislation Enters Final Window Period

The next two weeks will be a critical window for the “Clarity Act” to be voted on in Congress. If major breakthroughs are not achieved, the chances of the bill being passed will drop significantly.

Author: Guo Liqin, Researcher at Caijing

In June, as U.S. crypto legislation enters another sprint phase, the outcome of whether the U.S. can pass its first law covering all types of cryptocurrency regulation is essentially within reach.

Before the congressional recess in late May, the U.S. Senate Committee on Banking, Housing, and Urban Affairs (hereinafter the “U.S. Senate Banking Committee”) suddenly held a key hearing on the Digital Asset Market Clarity Act (hereinafter the “Clarity Act”) and passed a procedural vote by a margin of 15:9. Since June 1, the Clarity Act has been formally placed on the Senate legislative agenda, but behind-the-scenes maneuvering has intensified. As of the time of publication, the exact timing of the next full vote is still uncertain.

Before any formal vote, there were multiple rounds of behind-the-scenes negotiations aimed at building consensus. In the first three weeks of June, under pressure from multiple industry groups, lawmakers from both the Democratic and Republican parties held several negotiations on the Clarity Act, but failed to reach an agreement. As Caijing analyst Sun Yuanzhao noted, given the current situation, the bill is too controversial—“it’s still in ICU.” If the number of votes expected to pass is not sufficient, the Senate would not dare to bring it to an official vote.

At the same time, the legislative window is narrowing. If no further progress is made in the next two weeks, the bill’s outlook will be in serious jeopardy.

Judging by the previous year, the schedule for the Clarity Act has already fallen behind. On June 17, 2025, after the U.S. Senate concluded its long debate, it moved into a full-vote phase and passed the GENIUS Act by a large margin—establishing issuance and operating rules at the federal level for payment stablecoins backed by the U.S. dollar. On July 17 of the same year, the U.S. House of Representatives passed the bill. One day later, after U.S. President Trump signed it, the GENIUS Act took effect as law.

Although progress has not been smooth, on June 12 White House digital asset adviser Patrick Witte reaffirmed that the Trump administration plans to push the Clarity Act through Congress around July 4. He revealed that all parties are currently working to resolve a series of issues, including coordinating the Clarity Act’s wording between the two committees, negotiations with Democratic lawmakers on moral clauses, and enforcement issues related to illegal financial measures. This also means that, from now until the August congressional recess, there is only one feasible legislative window.

Then on June 18, the House of Representatives—where Republicans have the advantage—also began to express support. Dasty Johnson, chair of the Digital Assets Subcommittee of the House Agriculture Committee, said that if the Senate reviews the Digital Asset Market Structure Bill before the August recess, the House will quickly take action on the Clarity Act, thereby eliminating other procedural uncertainties. This statement shows that the House is compressing its own process in order to support the bill’s passage.

In that case, whether the Clarity Act can become law before the August recess depends on whether the Senate leadership can secure enough votes in the next 1–2 weeks.

Banks say the bill has regulatory loopholes

The Clarity Act aims to cover all types of cryptocurrencies and establish unified rules for their issuance, trading, and regulation.

The bill’s main purpose is to clearly define which cryptocurrencies are securities and which are commodities, and thus determine whether the regulator falls under the U.S. Securities and Exchange Commission (SEC) or the U.S. Commodity Futures Trading Commission (CFTC).

More specifically, the Clarity Act divides digital assets into three regulatory categories based on their level of maturity or decentralization. Assets running on sufficiently decentralized networks (for example, Bitcoin, Ethereum, and Solana) are treated as commodities, fall under CFTC jurisdiction, and can be traded for spot and cash transactions. Token sales constructed in the early stage in the form of investment contracts are treated as securities, remain under SEC regulation, and must fulfill corresponding disclosure obligations. Approved payment stablecoins will be jointly regulated by the SEC, CFTC, and the banking industry, with the GENIUS Act framework serving as the regulatory foundation.

But among all the lobbying groups involved in the Clarity Act, banks have consistently been the loudest and most forceful side.

Although a research report by the well-known forecasting firm Galaxy Digital suggests that if the Clarity Act becomes law, it could bring tens of trillions of dollars of foreign capital into the U.S. financial system—enough to offset any impact on U.S. bank deposits caused by stablecoins—banking industry players do not see it that way.

Over the past three weeks, the U.S. banking industry has started to further apply pressure during the final lobbying window. They no longer rely solely on the American Bankers Association (ABA) to speak out. The banking industry’s biggest concern is that the bill would allow crypto companies to offer economic incentives to customers who use USD stablecoins. They also believe that exchanges such as Coinbase will follow the usual Silicon Valley playbook: first attract customers with massive rewards, and then gradually phase out those benefits over time. Ultimately, the outcome would be that large capital flows from banks to crypto companies.

Jamie Dimon, CEO of JPMorgan Chase and a top figure in U.S. banking, was the first to step in, saying that JPMorgan and other banks plan to oppose the current version of the Clarity Act. Dimon supports blockchain technology and believes stablecoins have practical value in areas such as cross-border payments. What worries him is that crypto companies may be able to pay interest or other similar rewards to stablecoin holders, while the bill lacks sufficient anti-money laundering (AML) and Know Your Customer (KYC) safeguards—regulations that banks have always complied with. He argues that crypto firms offering stablecoin yields should be regulated at the same level as banks.

Dimon also again took aim at Coinbase CEO Brian Armstrong, saying Armstrong is spending hundreds of millions of dollars in Washington to push the bill toward final passage. The tension between Dimon and Armstrong has long existed, but as the Clarity Act grows closer to a full Senate vote, this tension is now erupting openly.

Coinbase responded quickly, denying that it is carrying out activities similar to banking. In interviews, they said, for example, that securities accounts, Starbucks recharge cards, and bank accounts are different products, and the way these accounts are regulated should therefore differ from that of banks.

On June 10, Ripple (XRP) CEO Brad Garlinghouse publicly accused Dimon of “deliberately distorting” the Clarity Act, saying it was to protect JPMorgan’s payment settlement business. Garlinghouse pointed out that JPMorgan’s payment settlement business generates about $20 billion in annual revenue and more than $5 billion in profit each year. He also noted that JPMorgan in fact operates its own blockchain project—JPM Coin and the Onyx platform—and that other large banks, such as Citibank, are also expanding into more diversified crypto-related business activities.

On June 17, the Bank Policy Institute (BPI), a nonprofit organization affiliated with the American Bankers Association, released a report stating that under the existing provisions, certain custodians (including offshore custodians), service providers, exchanges (including those that facilitate stablecoin trading), non-custodial wallets, and decentralized finance (DeFi) developers, administrators, and software providers would not be subject to the Clarity Act. Therefore, the bill imposes comparatively lighter AML/CFT (anti-money laundering/anti-terrorist financing) obligations on certain crypto entities that perform functions similar to banks, making them an attractive choice for those trying to evade law enforcement agencies or national security reviews.

Second, the bill does not explicitly authorize the U.S. Department of the Treasury to impose sanctions or regulation on mixers, Bitcoin tumblers, and other blockchain applications used for money laundering, terrorist financing, and evading sanctions.

BPI believes these gaps are not conducive to innovation and instead benefit illegal financial activities. If Congress wants to build effective regulation of the crypto industry, it must close these loopholes.

Despite ongoing criticism of the bill’s loopholes from U.S. banking executives including Jamie Dimon, insiders familiar with the negotiation process say that the stablecoin yield provisions no longer appear to be the main sticking point. Instead, all parties are working to find common ground.

Legislative maneuvering enters a stalemate

In the United States, a bill must pass both the House of Representatives and the Senate and then be signed by the President to become law.

Similar to the push for the GENIUS Act in 2025, the White House has set a target to sign the Clarity Act around July 4, but a broader deadline is before the August congressional recess. After the recess, it will be fall. Because of conflicts with the midterm election schedule, the bill is likely to face a complete standstill.

As mentioned earlier, the U.S. Senate Banking Committee approved an amended version of the bill earlier in May; in January of this year, the U.S. Senate Committee on Agriculture also advanced its version. Currently, representatives from the two committees are working to merge the two bills—an important step before the full Senate considers them. However, this step is now stuck in stalemate.

In the Senate’s next round of voting, if the bill cannot secure 60 votes out of 100 senators, it will enter a “filibuster” or extended debate procedure, increasing the difficulty and introducing more uncertainty into passage. In this Senate, Republicans hold about 53 seats. Even if Republicans remain united under pressure from the Trump administration, they are still short by roughly 7 votes. The side pushing the legislation is working to secure support from 7 Democratic senators.

In the current Senate, a bill requiring 7 cross-party votes is highly uncertain.

In the Banking Committee’s first round of votes in the Senate, besides all Republican senators, Democratic senators from Arizona (Ruben Gallego) and from Maryland (Angela Alsobrooks) also voted in favor of the bill together with all the Republicans on the committee. However, they also stated that continuing to support the Clarity Act in the next round would be conditional.

Public information shows that the conditions for Democratic lawmakers to support the bill are consistent: adjusting the wording around conflicts of interest and ethics rules for Trump and regulators, stablecoin yield rules, illegal finance and AML provisions, and protections for decentralized finance. At present, lawmakers are searching for a more concise conflicts-of-interest clause to win the support of 7 Democratic senators while not losing the base of Republican lawmakers who insist on the current version.

Insiders familiar with the negotiation process say that legislators and industry participants have largely reached consensus on the substantive content of the legislation. Discussions are increasingly centered on the conflicts-of-interest and ethics clauses, which would limit government officials, during their time in office, from participating in commercial activities related to cryptocurrencies.

In addition, the insider said the arguments now are about enforcement: how to enforce these restrictions, rather than whether the restrictions should exist.

This is a positive signal for passage, but the legislative window for 2026 is indeed short. If the disputes cannot be resolved in the next two weeks, the remaining two working weeks in July before Congress’s recess will not be enough to carry the subsequent legislative process forward.

As the legislative process for the Clarity Act moves forward, cryptocurrencies have continued to fall over the past few months.

For example, Bitcoin has recently experienced a sharp pullback. Compared with its historical high, it is down more than 40%. Market consensus generally considers the current phase as a bear-market—or “hidden bear” market—style consolidation and correction. On June 5, Bitcoin briefly fell below $60,000, reaching the lowest level since October 2024, down more than 50% from the $126,000 historical high in 2025.

Meanwhile, by June 21, Bitcoin had fallen to 15th place in the global ranking by total asset market capitalization, down from a peak of 5th place last year. Driven by the boom in the semiconductor industry and strong performance among technology stocks, SK Hynix’s market capitalization has surged rapidly, and it may even surpass Bitcoin.

Sun Yuanzhao believes, “Right now, the legislative process is entirely a political operation, and it probably has little to do with market fluctuations.”