Negotiations in the U.S. Senate have stalled along partisan lines on the CLARITY Act, a bill aimed at clarifying cryptocurrency regulations. The legislation, which passed the House in July, seeks to classify digital assets and assign regulatory oversight. With the crypto market surging to $4 trillion in 2025, industry leaders are pressing for action amid ongoing talks.
Hopes for passing comprehensive cryptocurrency legislation this year are dimming as partisan divides halt progress in the Senate. The CLARITY Act would reclassify many cryptocurrencies as commodities, similar to oil or wheat, rather than securities like stocks or bonds. This shift would impose looser rules and determine jurisdiction between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
Momentum built after President Donald Trump signed a stablecoin regulation law over the summer. The global crypto market has grown dramatically, from $192 billion in 2019 to $4 trillion in 2025, a 1,983% increase. Senators are meeting with crypto industry leaders this week to push forward, even during a government shutdown, highlighting the sector's urgency.
The bill passed the House in July but faces delays in the Senate. A planned September 30 markup was postponed after 12 pro-crypto Democrats proposed stricter regulations, particularly for decentralized finance (DeFi), which enables peer-to-peer transactions without centralized institutions.
Democrats emphasize consumer protections against fraud and money laundering, and restrictions on officials like President Trump owning crypto firms. "The crypto lobbyists are crawling all over Capitol Hill, and what are they looking for?" said Senate Banking Committee Ranking Member Elizabeth Warren, D-Mass., during an October 1 hearing. "To make it harder to track what's happening in crypto transactions if they are being used for illegal purposes."
Republicans prioritize innovation and seek regulatory clarity. "The industry is pretty united. They want regulation, which is fantastic. The industry is crying for certainty, clarity to say, ‘Hey, what are the rules of the road?’" said Sen. Bernie Moreno, R-Ohio, a Banking Committee member and crypto advocate. He blamed Democrats for the impasse, citing political fears: "[Democrats] just don't want to do anything because they're afraid that somebody on social media will say, ‘Why are you cooperating with the Republicans?’"
A spokesperson for Senate Banking Committee Chairman Tim Scott, R-Fla., noted efforts for bipartisanship: "In pursuit of a bipartisan market structure markup, Chairman Scott and Banking Committee Republicans delayed the September 30 markup to give Democrat colleagues additional time to come to the table and substantively engage on legislative text. Since June, the Committee has released principles, held a hearing, and published two discussion drafts–each reflecting feedback from members, industry, and regulators. Despite repeated requests for edits and redlines from Democrats, they have yet to provide formal feedback or agree to a markup date. The Chairman remains optimistic that Democrats will return to the negotiating table, engage in good-faith efforts to finalize the text, and set a markup date as soon as possible to deliver the regulatory clarity America’s digital asset industry needs to thrive."
The crypto industry's influence is evident: it spent $40 million in the 2024 Ohio Senate election to unseat former Sen. Sherrod Brown, a strict regulator. Delays could lead to more spending in the 2026 race, where Brown challenges Sen. Jon Husted, R-Ohio.