White House and Treasury Push Senate to Pass Clarity Act as Legislative Window Narrows

The White House and Treasury are urging the Senate to pass the Clarity Act, a bill to create a U.S. crypto regulatory framework, before a narrow legislative window closes ahead of midterm elections. The bill faces significant hurdles, including an ethics provision aimed at President Trump's crypto holdings, opposition from the banking industry over stablecoin rules, and concerns from law enforcement about anti-money laundering provisions.

Clarity Act Senate timeline

• ▪Treasury Secretary Scott Bessent stated he is looking forward to the Clarity Act being passed by summer 2026
• ▪A prediction market is pricing in a 59% probability that the Clarity Act will be enacted by the end of 2026
• ▪Senator Cynthia Lummis has warned that if the Clarity Act is not passed in 2026, it may not be considered again until 2030

Competing legislative priorities

• ▪President Donald Trump has insisted that voter identification and proof-of-citizenship requirements be added to either the FISA or housing legislation
• ▪Other legislative items competing for the Senate's attention include an immigration-enforcement funding bill, a bipartisan housing bill, and the National Defense Authorization Act
• ▪The Clarity Act must compete for Senate floor time with must-pass bills, including the extension of the Foreign Intelligence Surveillance Act (FISA)

Presidential ethics provision dispute

• ▪Concerns over President Donald Trump's personal crypto ventures, which have reportedly made him millions, could jeopardize the bill's future
• ▪A potential compromise being discussed is a "runway period" that may not require President Trump to immediately divest from his crypto interests
• ▪Senate Democrats widely consider a bill without limits on officials' crypto holdings to be a "dealbreaker."
• ▪A major point of contention in the Clarity Act is an ethics provision aimed at President Donald Trump that would ban government officials from having personal stakes in crypto

Senate committee negotiations

• ▪One negotiation point is a potential requirement for the White House to nominate people to fill all four commissioner vacancies at the Commodity Futures Trading Commission
• ▪The Clarity Act would establish a comprehensive regulatory framework for digital assets, defining when crypto tokens are classified as securities or commodities
• ▪Senate leadership is working to merge the Banking Committee's version of the bill with the Agriculture Committee's version before a full floor vote
• ▪The Clarity Act cleared the Senate Banking Committee on May 14, 2026, with a 15-9 bipartisan vote

Banking industry opposition

• ▪Coinbase withdrew its support for the bill in January 2026, citing disputes over the treatment of stablecoin rewards
• ▪The banking industry is expected to continue lobbying against the Clarity Act, viewing a provision on stablecoin yield as a threat to their deposit base

DeFi developer protections

• ▪A coalition of 160 former U.S. national security, intelligence, and law enforcement officials urged the Senate to pass the Clarity Act
• ▪White House crypto adviser Patrick Witt defended the bill, calling it a "pro-regulatory, pro-enforcement bill."
• ▪Democratic Sen. Catherine Cortez Masto voted against the Clarity Act in committee, stating it undermines law enforcement’s ability to trace illicit finance
• ▪Law enforcement groups and some lawmakers have raised concerns that the Clarity Act and BRCA could make it harder to crack down on financial crime