Is the outlook optimistic for the passage of the CLARITY Act? Why is September 15 crucial?

On August 19, 2026, at Wyoming’s annual SALT conference, White House digital asset adviser Patrick Witt told hundreds of crypto industry professionals in attendance: “I am genuinely optimistic and bullish about this.”

The “this” he referred to was the Digital Asset Market Clarity Act (CLARITY Act), which has been moving through the U.S. Congress for more than a year. This bipartisan legislation, spanning more than 600 pages, aims to establish a unified federal regulatory framework for crypto assets. Senate Majority Leader John Thune has formally scheduled the cloture vote on the bill for September 15.

From the House’s 294-134 passage in July 2025, to its 15-9 approval by the Senate Banking Committee in May 2026, and now to its passage probability plunging from 82% at the beginning of the year to 10%-20%—the CLARITY Act’s legislative journey is like a mirror, reflecting the complex process of U.S. crypto regulation moving from “fuzzy consensus” to “institutional bargaining.”

What exactly is this 600-page bill trying to solve?

The CLARITY Act, formally known as the Digital Asset Market Clarity Act, is the first bipartisan U.S. legislation aimed at establishing a unified federal regulatory framework for crypto assets. Its core functions can be summarized across three areas.

First, it clarifies the classification of tokens by asset type. Decentralized native tokens such as Bitcoin and Ethereum would fall under the jurisdiction of the Commodity Futures Trading Commission (CFTC) and be defined as “digital commodities”; tokens that rely on team operations and have centralized issuers would be regulated by the Securities and Exchange Commission (SEC) under securities standards. This division would end the years-long jurisdictional tug-of-war between the SEC and CFTC.

Second, it establishes a complete registration and compliance pathway. The bill creates a clear compliance framework for crypto exchanges, DeFi protocols, digital asset custody, and cross-border transactions. For years, U.S. crypto companies have faced a regulatory environment of “regulation by enforcement”—without a clear compliance pathway, institutional capital has struggled to enter at scale, while innovative projects have been forced overseas.

Third, it places payment stablecoins under an independent regulatory framework, excluding them from the definitions of “securities” and “digital commodities.” At the same time, the bill clarifies the boundaries of DeFi regulation and includes non-custodial software developer protections based on the Blockchain Regulatory Certainty Act, ensuring that innovation in underlying blockchain technology is not stifled by stringent financial regulation.

If enacted, the CLARITY Act would mean that the U.S. crypto industry would obtain clear “rules of the game” for the first time. The market has compared its policy significance to the reshaping of the derivatives market by the Commodity Futures Modernization Act of 2000.

Why has the stablecoin rewards dispute become the biggest obstacle to passage?

Among the more than 600 pages of the CLARITY Act, the provision attracting the most concentrated controversy and intense bargaining is not token classification or exchange registration, but Section 404—the provision concerning stablecoin rewards.

This seemingly technical provision is actually part of a deeper struggle between the crypto and banking industries over “where money should flow.”

The core question is: Should stablecoin holders have the right to share in the returns generated by the underlying reserve assets? The banking industry argues that if stablecoin yields compete with interest on bank deposit accounts, depositors may move funds from banks into stablecoins. The American Bankers Association (ABA), JPMorgan Chase, and other major banks are actively pressuring the CLARITY Act negotiations, demanding that the stablecoin yield provisions be tightened or even prohibited.

The banking industry’s comparative data is quite clear: The current interest rate on JPMorgan Chase’s standard retail savings account is just 0.01%, while some stablecoin platforms offer annualized yields of 3.75% or more. JPMorgan Chase CEO Jamie Dimon said explicitly in an interview in June 2026: “Banks will not accept this situation. We will fight to the end.”

The crypto industry takes a different position. Rashan Colbert, director of U.S. policy at the Crypto Council for Innovation, said there is currently no evidence that stablecoins are draining bank deposits—the FDIC’s first-quarter 2026 data showed that the U.S. banking industry as a whole earned $80.5 billion, a record high, while bank deposits posted net growth for the seventh consecutive quarter.

Previously, Democratic Senator Angela Alsobrooks of Maryland and Republican Senator Thom Tillis of North Carolina reached a compromise that ended months of disputes: Platforms could not pay rewards solely because users held stablecoins, but could pay rewards for trading and payment activities. However, Tim Scott, chairman of the Senate Banking Committee, acknowledged at the SALT conference: “We thought the stablecoin issue had been resolved, but now the rearview mirror is getting bigger and the windshield is getting smaller. We still need more time to resolve this issue.”

Why have conflict-of-interest provisions caused the two parties to remain deadlocked?

Beyond stablecoin rewards, another equally difficult line of dispute has run through the entire legislative process: crypto ethics provisions for public officials.

Democrats are demanding that senior federal officials holding more than $1 million in crypto assets or more than 10% ownership in a project be required to fully divest, while imposing strict conflict-of-interest safeguards on the president’s large crypto holdings. The background to this demand is that Trump’s 2025 financial disclosures showed approximately $1.2 billion to $1.4 billion in cryptocurrency profits.

Trump had previously agreed to an ethics provision prohibiting public officials from issuing or sponsoring digital assets while in office, while allowing them to continue investing in digital assets. It also includes a sunset clause set to expire in January 2029. Trump is currently considering the latest ethics proposal jointly introduced by Democratic Senator Ruben Gallego of Arizona and Tillis, which includes authorization for state attorneys general to enforce the relevant provisions.

The two parties’ tug-of-war over the ethics provisions is one of the core reasons the CLARITY Act’s passage probability has fallen from 82% to 10%-20%. Senate Republicans currently have 53 votes, while advancing the bill requires 60, meaning at least seven Democratic senators would still need to support it. Without consensus on the ethics provisions, the bipartisan vote gap will be difficult to close.

What does the September 15 vote mean?

The September 15 vote is not a final vote, but a procedural vote on a cloture motion. Its significance is that, if approved with 60 votes, the bill can proceed to a full Senate vote; if it fails, the likelihood of the CLARITY Act passing in 2026 will fall sharply, and the next viable window may be delayed until after the midterm elections, in 2027.

At the SALT conference, Witt said the White House would engage seriously with Democratic lawmakers before the vote to bridge differences, with the goal of securing solid support on September 15.

But the time window is extremely limited. The Senate is currently in its August recess, and after reconvening in mid-September, only a few weeks will remain before the midterm elections. If the September window is missed, the legislative process could be completely overtaken by electoral politics.

In terms of market pricing, Gate’s prediction market data shows that the probability of the CLARITY Act being signed into law in 2026 has fallen from a February peak of 82% to approximately 20%. Galaxy Digital’s research department is more pessimistic, lowering the figure to 10%.

What structural changes would the crypto industry undergo if the bill passes?

If the CLARITY Act ultimately passes and is signed into law, its impact on the crypto industry will be structural.

For centralized exchanges (CEXs), the bill will provide a clear federal registration and compliance pathway. The question that has long troubled the industry—“Which regulator should exchanges register with?”—will be answered, removing the institutional barriers to the entry of capital.

For DeFi, the bill clarifies the regulatory boundaries. If DeFi governance tokens meet disclosure, decentralization, and utility requirements, they can claim safe-harbor protection. This will open the door to U.S. DeFi front ends and institutional DeFi treasuries.

For the stablecoin market, the specific implementation of Section 404 will determine the room for yield-bearing stablecoins to survive in the United States. If the provision is strictly enforced, the yield attributes of stablecoins will be significantly constrained; if the compromise preserves room for rewards in trading and payment scenarios, stablecoin innovation can remain vibrant.

For the broader crypto ecosystem, the enactment of the CLARITY Act will complete a core piece of the U.S. federal crypto regulatory framework, narrow the gap with global regulatory systems, and prevent the continued outflow of capital and technological innovation.

What is the alternative path if the bill fails to pass?

If the September 15 vote fails to secure 60 votes, the likelihood of the CLARITY Act becoming law in 2026 will be extremely slim.

Ripple Chief Legal Officer Stuart Alderoty noted that if the bill fails to pass, the SEC and CFTC will continue advancing their own rulemaking efforts, but legislation would provide a more durable framework than administrative rules. In a statement on August 18, 2026, SEC Chairman Paul Atkins said the SEC “will continue to support Congress sending the CLARITY Act to the president’s desk,” while also advancing tailored rules for crypto assets that are not securities.

This means that even if the CLARITY Act stalls, regulators may still fill some regulatory gaps through rulemaking. However, administrative rules can be overturned by subsequent administrations, while legislation offers greater institutional stability once enacted. Citing research from the National Cryptocurrency Association, Alderoty warned that without such legislation, the United States could lose 232,000 crypto-related jobs and $55 billion in economic activity.

Conclusion

The CLARITY Act’s legislative process is a key turning point as U.S. crypto regulation moves from chaos toward institutionalization. The Senate’s procedural vote on September 15 will determine whether this more-than-600-page bill can complete the final leg of its journey in 2026.

The bill currently faces three obstacles: continued pressure from the banking industry over the stablecoin rewards provisions, the two parties’ deadlock over the ethics provisions, and insufficient bipartisan support under the 60-vote threshold. White House crypto adviser Witt’s optimistic remarks have injected confidence into the market, but the probability curve from 82% to 10% reminds us that in political bargaining, technical disputes over provisions are often more decisive than grand policy visions.

Regardless of the outcome on September 15, the direction represented by the CLARITY Act—establishing clear rules for the crypto industry—has already received public backing from a bipartisan House majority, bipartisan support in the Senate Banking Committee, and a senior White House adviser. This institutional struggle over the regulatory framework will not end with a single vote.

FAQ

Q: What is the full name of the CLARITY Act?

A: The CLARITY Act’s full name is the Digital Asset Market Clarity Act. It is the first bipartisan U.S. legislation aimed at establishing a unified federal regulatory framework for crypto assets.

Q: What type of vote is the September 15 vote?

A: The September 15 vote is a procedural vote on a cloture motion, not a final vote. The bill needs 60 votes to advance to a full Senate vote.

Q: What is the focus of the dispute over the stablecoin rewards provisions?

A: The focus is whether stablecoin holders have the right to share in the returns from underlying reserve assets. The banking industry believes this would threaten the bank deposit base, while the crypto industry argues that platform rewards differ from bank interest.

Q: What is the current probability of the CLARITY Act passing?

A: As of August 2026, Gate’s prediction market data puts the probability of passage at approximately 20%, while Galaxy Digital estimates it at approximately 10%.

Q: What impact would the failure of the CLARITY Act have?

A: If the bill fails to pass, the SEC and CFTC will continue advancing their own rulemaking efforts, but without the institutional stability of legislation. Research from the National Cryptocurrency Association estimates that the United States could lose 232,000 crypto-related jobs and $55 billion in economic activity.