Republican senators updated the Clarity Act on Wednesday, which would prohibit the president and other federal officials from issuing or endorsing cryptocurrencies and other digital assets. Republicans will need to secure support from at least seven Democratic senators in the Senate to overcome the 60-vote threshold. A core point of contention in negotiations is that Trump previously earned billions of dollars from crypto-related ventures. Senators may vote on the bill within the next two weeks before the August recess.
The U.S. Senate is advancing landmark cryptocurrency legislation that would explicitly ban federal officials, including the president, from issuing or endorsing digital assets, with a vote expected as early as next week.
Republican senators released an updated version of the Clarity Act on Wednesday, marking the first time federal officials’ activities involving crypto assets would be subject to restrictions.
Trump has expressed support for the bill’s ethics provisions—a development drawing significant attention, as recently disclosed documents indicate he earned approximately $1.2 billion in crypto-related income during his first year back in the White House.
The Department of Justice would be responsible for enforcing the bill, with violators facing fines of up to $250,000 per day. Senate Majority Leader John Thune stated that the Senate is expected to vote on the legislation within the coming weeks.
Whether the bill can garner sufficient bipartisan support remains the biggest uncertainty. Passing the bill in the Senate requires 60 votes, but Democrats have strongly objected to the enforcement mechanism, arguing that entrusting regulatory authority to the Department of Justice is unreliable. Meanwhile, the banking sector has also expressed reservations about provisions related to crypto rewards.
This legislation represents a milestone for the cryptocurrency industry. On Tuesday, media reports indicated that the White House and Republican senators had reached agreement on the ethics provisions of the Clarity Act, driving Coinbase shares up by approximately 10% that day, with Circle and Bitcoin also rallying.
However, following the release of the detailed provisions today, the market rally failed to hold. As of this writing, Coinbase was down 5% in Wednesday trading, Circle fell 7%, and Bitcoin declined 1%, while Ethereum dropped 0.1%.
Ethics Provisions Emerge as Key Point of Contention
Ethical oversight arrangements constitute the core sticking point in the current round of negotiations.
According to the bill text obtained by CNBC, the latest draft includes a new provision explicitly prohibiting the President and federal officials from issuing or promoting any digital asset—a first in U.S. legislative history that draws a clear red line around presidential involvement in cryptocurrency activities.
However, Democrats still have fundamental disagreements regarding the enforcement mechanism.
Democratic Senator Angela Alsobrooks of Maryland explicitly stated she is unwilling to support a proposal that assigns oversight of crypto ethics regulations to the Department of Justice under Trump. She noted this week that Trump personally benefited by billions of dollars from the crypto sector last year, making Democratic support for the bill politically increasingly difficult.
Thune took a firm stance on the matter. "Once the text is released, we need to figure out how many changes it will take to secure 60 votes," he said. "In any case, we must move forward with a vote."
Regarding timing, Thune indicated the Senate would vote on the bill “within the coming weeks,” just before Congress adjourns for its August recess. This leaves limited time for negotiations, and whether the parties can bridge their differences on the enforcement mechanism for the ethics provisions will be critical to the bill’s advancement.
The crypto industry voices strong support, while the banking sector remains opposed.
Within the industry, major cryptocurrency firms such as Coinbase and Ripple have consistently advocated for a unified national regulatory framework, and the Clarity Act represents one of the key outcomes of their long-standing lobbying efforts.
The banking sector has taken a starkly different stance. On the same day the updated text of the bill was released, multiple banking groups—including the American Bankers Association and the Financial Services Forum—jointly stated that the legislation 'would still jeopardize local lending activities that drive U.S. economic activity.'
Banks particularly oppose the interest-like reward mechanisms offered by crypto platforms, arguing that such practices constitute unfair competition.
Bipartisan willingness to cooperate remains
Despite clear differences, some key lawmakers expressed cautious optimism this week about reaching an agreement.
Senator Kirsten Gillibrand of New York—a Democrat and chair of the Democratic Senatorial Campaign Committee—and Republican Senator Cynthia Lummis of Wyoming both indicated that there is still room for consensus in negotiations.
Gillibrand's involvement is particularly noteworthy. As the steward of Democratic campaign fundraising, her stance reflects, to some extent, the party’s pragmatic assessment of the cryptocurrency industry’s political influence rather than purely policy-based considerations.
The bill has been designated as one of the Trump administration’s legislative priorities, aiming to establish the first comprehensive regulatory framework for digital asset markets—an initiative of significant importance given the long-standing regulatory ambiguity surrounding the cryptocurrency industry.
Cryptocurrency industry political spending pressures Democrats
The legislative outlook is deeply intertwined with the political capital deployed by the cryptocurrency industry.
According to Federal Election Commission filings, Fairshake, a political action committee supporting the cryptocurrency industry, along with its two affiliated super PACs, has raised $164 million for this midterm election cycle and has already spent $66.6 million to influence election outcomes.
Analysts note that if Democrats choose to block this industry-priority legislation, they could face significant political pushback funded by these resources. For Democratic lawmakers currently in the midst of an election cycle, this pressure objectively serves as an additional incentive to support the bill.
Editor/Stephen