Crypto Market Regulation Is Running Out of Time at the Finish Line

The CLARITY Act was supposed to resolve a relatively straightforward, if technically difficult, question: When is a digital asset a security, when is it a commodity, and which federal regulator is responsible for overseeing the companies that trade it?

After more than two years of committee hearings, industry lobbying, draft legislation and bipartisan negotiation, Congress is closer than it has ever been to answering that question. The House has passed a market-structure bill by a wide margin. The Senate Banking Committee has approved its own amended version. The measure now sits on the Senate legislative calendar.

Yet the bill’s most difficult remaining problem may no longer be market structure. It is political structure.

With the Senate’s August recess approaching and the 2026 midterm calendar beginning to compress legislative time, the realities of Washington’s unique political animal threaten to stall a bill whose underlying regulatory framework has attracted proven bipartisan support.

See also: Two Years Ago vs Today: Looking at Crypto Regulation in the US

The Clarity Act Timeline to Date

Formally, the Digital Asset Market Clarity Act of 2025, or H.R. 3633, is designed to divide oversight of the digital asset market between the Securities and Exchange Commission and the Commodity Futures Trading Commission and establish federal rules for digital asset issuers, exchanges, brokers and dealers.

However, regulatory clarity is not only about defining assets and assigning agencies. It is also about deciding who benefits from the framework, who is permitted to compete with banks, and whether lawmakers can regulate a market in which political figures may have direct commercial stakes.

Here is how the bill’s passage has looked so far:

May 22, 2024 — FIT21 passes the House, 279-136. The Financial Innovation and Technology for the 21st Century Act, CLARITY’s legislative predecessor, demonstrates that a crypto market-structure bill can attract substantial bipartisan support; 71 Democrats vote for it. It does not advance in the Senate before the end of the 118th Congress.

May 29, 2025 — The CLARITY Act is formally introduced as H.R. 3633. House Financial Services Chairman French Hill and House Agriculture Chairman G.T. Thompson introduce the bill with a bipartisan group of original co-sponsors, establishing it as the House’s principal digital asset market-structure vehicle.

June 11, 2025 — Two House committees approve the legislation. The House Financial Services Committee advances it 32-19, while the House Agriculture Committee approves it 47-6. Because the bill divides responsibilities between the SEC and CFTC, both committees’ approval is required.

July 17, 2025 — The House passes CLARITY, 294-134. The bipartisan vote sends the legislation to the Senate and gives Senate negotiators a House-passed foundation on which to build.

July-September 2025 — Senate Banking begins writing its own version. On July 22, Chairman Tim Scott and Sens. Cynthia Lummis, Bill Hagerty and Bernie Moreno release an initial discussion draft and request stakeholder feedback. A second discussion draft follows in September, signaling that the Senate intends to substantially amend rather than simply approve the House language.

Nov. 10, 2025 — Senate Agriculture releases a bipartisan companion draft. Chairman John Boozman and Sen. Cory Booker propose legislation giving the CFTC new authority over digital commodities. This creates a parallel Senate track. Banking handles securities and banking provisions, while Agriculture handles the CFTC portion, and the two eventually must be combined.

Read also: Crypto Embraces Regulator-in-the-Loop Strategy as Federal Rules Roll Out

Jan. 9-12, 2026 — Senate Banking prepares its first committee vote. Scott schedules a Jan. 15 markup and releases a negotiated manager’s amendment reflecting months of discussions with Democratic senators. It is the first concrete attempt to move a Senate version out of committee.

Jan. 14-15, 2026 — The Banking markup is postponed after Coinbase objects. Coinbase says it cannot support the draft in its current form, while disagreements persist over stablecoin rewards and other provisions. The committee postpones the Jan. 15 session without immediately setting a replacement date, marking the bill’s first major Senate breakdown.

Jan. 29, 2026 — Senate Agriculture advances its portion of the framework. The committee approves the Digital Commodity Intermediaries Act, which would expand CFTC authority and consumer protections in digital commodity markets. The vote keeps the CFTC track moving, even though Banking’s portion remains stalled.

Feb. 3, 2026 — White House mediation fails to produce a bank-crypto compromise. A meeting involving banking and crypto industry representatives ends without agreement. The principal dispute is whether exchanges and other intermediaries should be allowed to offer rewards tied to stablecoin holdings, which banks argue could draw deposits out of the banking system.

March 5, 2026 — Banks reject a White House compromise. The proposed compromise would permit rewards for certain payment or transactional activities but not for idle stablecoin holdings. Banking groups remain opposed, creating another impasse; ethics, illicit finance provisions, committee reconciliation and limited Senate floor time also emerge as obstacles.

May 12-14, 2026 — Senate Banking revives and advances with Scott, Lummis and Sen. Thom Tillis releasing updated text May 12. Two days later, the Banking Committee approves an amended version of H.R. 3633 by a bipartisan 15-9 vote, sending it toward possible full-Senate consideration.

June 1, 2026 — The Senate version is reported and placed on the legislative calendar. The amended bill is designated Calendar No. 423, making it procedurally eligible for Senate floor consideration. Calendar placement, however, does not mean that leadership has scheduled debate or a vote.

By July 17, 2026 — An ethics dispute freezes floor action. Democratic negotiators seek restrictions addressing public officials’ financial interests in crypto, particularly following disclosures concerning President Donald Trump’s crypto ventures. Other outstanding issues include stronger illicit finance provisions, limited review time and reconciliation of the Banking and Agriculture texts. No bipartisan ethics language has yet resolved the dispute.

Aug. 7, 2026 — The next practical deadline. This is not a statutory deadline, but the Senate is expected to leave Washington after Aug. 7. Missing the pre-recess window would push consideration deeper into the midterm-election calendar, when floor time and political appetite for a complex bipartisan package are likely to become more constrained.

Congress Has Moved Beyond the SEC-CFTC Oversight Debate

Whether or not Congress finishes the legislation this year, the bill is already influencing the digital asset market. Banks, exchanges, issuers, custodians and investors now have a detailed indication of where federal policy is heading. Companies can see the likely contours of registration, asset classification, anti-money laundering obligations, custody rules and stablecoin restrictions, even though the exact requirements have not become law.

Large firms can begin building compliance systems around the anticipated framework, hiring personnel and adjusting products before legislation passes. Small companies must decide whether to spend scarce capital preparing for rules that may change, remain unresolved or disappear entirely if the bill fails.

Still, the PYMNTS Intelligence report “Waiting for Certainty: Why Most CFOs Are Holding Back on Crypto and Stablecoins,” the March installment of The 2026 Certainty Project, showed that most middle-market companies remain cautious about digital assets. Usage is limited, with 13% of firms using stablecoins and 5% employing other cryptocurrencies.