Crypto bill faces make-or-break moment ahead of August recess

A cryptocurrency regulation bill is facing a make-or-break moment as senators seek to resolve remaining policy disputes in the next four-week stretch, which experts warn is likely the last window to pass the legislation before the midterm elections.

Bipartisan negotiations over the Clarity Act, which aims to provide a regulatory framework for the digital assets industry, are coming down to the wire ahead of Congress’ monthlong August recess.

Republicans and crypto-friendly Democrats still have yet to reach agreements on key sticking points, like ethics rules for government officials and illicit finance.

If the bill fails to move forward before lawmakers leave town next month, there is little room in the calendar for another push before the midterms, which could shift control of Congress and send the legislation back to the starting line.

“In order to pass a cryptocurrency market structure bill this year, we think Congress needs to finish the bill before the August recess,” Brian Gardner, chief Washington policy strategist at the wealth management and investment banking firm Stifel, wrote in a note in late June.

“Passing a bill during the lame duck session following the midterm elections is hypothetically possible, but unlikely,” he said, adding, “We expect that talks will continue, but the calendar is the enemy. Time is running short. “

Senators have been negotiating the Clarity Act, the centerpiece of the crypto industry’s legislative aspirations, since last fall. The House’s version of the bill passed last July alongside the GENIUS Act, which was quickly signed into law by President Trump.

The GENIUS Act created a regulatory framework for a narrow subset of digital assets known as stablecoins. These digital tokens are tied to more stable assets, like the U.S. dollar. By contrast, the Clarity Act would cover a much broader swath of the industry.

But the bill has advanced haltingly through the upper chamber, which developed its own version of the legislation.

The Clarity Act passed out of the Senate Agriculture Committee along partisan lines in January but hit a snag in the Senate Banking Committee amid a dispute over a stablecoin rewards provision. The banking panel ultimately voted to move the bill forward in May.

Democratic Sens. Ruben Gallego (Ariz.) and Angela Alsobrooks (Md.),........

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