US Senate fails to advance sweeping crypto bill

The US Senate rejected sweeping cryptocurrency legislation known as the Clarity Act on Tuesday, falling short of the necessary 60 votes by a margin of 10. The bill, championed by President Donald Trump, aimed to establish a regulatory framework for digital assets, providing them with a more stable legal standing. However, four Republican senators — Jerry Moran, Susan Collins, Josh Hawley, and Thom Tillis — joined all Democrats in opposing the measure.

The vote resulted in a 50-49 outcome in favor of the opposition. This setback puts the bill on hold, as Congress is preparing to adjourn for the November midterm elections, where Trump's Republican counterparts are striving to retain control of both the House of Representatives and the Senate. In a last-ditch effort, Senate Republicans introduced a revised version of the bill on Sunday night, but opponents remained unconvinced.

The Clarity Act sought to create a regulatory framework for digital assets, which industry representatives claim would provide the sector with a more secure legal foundation. Bitcoin experienced a significant drop of more than 5% following the vote, marking its largest daily percentage decline since June. Shares of cryptocurrency exchange Coinbase and stablecoin issuer Circle also experienced losses, with some stocks plummeting as much as 10%.

With the bill's failure, the SEC and CFTC are now tasked with developing regulatory rules for the crypto industry. However, experts believe that only legislative action can create a lasting regulatory framework, as existing regulations may be subject to political shifts and legal challenges.