Senate blocks CLARITY Act despite White House data
The US Senate failed to advance the CLARITY Act on Tuesday, handing the cryptocurrency industry a major setback despite a late White House effort to challenge banking-sector warnings that stablecoin rewards could drain deposits and curb lending. The procedural vote ended 50-49 in favour of advancing the legislation, 10 votes short of the 60 required. Republican senators Jerry Moran, Rand Paul,…
The Senate failed to pass the CLARITY Act on Tuesday, despite efforts by the White House to sway lawmakers. The vote fell 50-49 short of the 60 votes needed for passage, with Republican senators Jerry Moran, Rand Paul, Josh Hawley, and Thom Tillis opposing it. Tillis later switched to no for procedural reasons. The White House Council of Economic Advisers released an interactive model to test assumptions about stablecoin rewards and their impact on bank lending, but banking groups remained skeptical.
The model suggested only minimal effects on lending, even under severe scenarios. Democrats pushed for stronger ethics provisions, particularly concerning digital assets held by senior public officials, but the final bill incorporated some of their changes and addressed illicit-finance controls and the roles of the SEC and CFTC.
The CLARITY Act's defeat leaves regulatory oversight as the primary method for establishing durable rules in the digital asset space.
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