Here’s a tighter, more streamlined rewrite with a clean, news-style tone:
All sides remain hopeful the Clarity Act can pass before the midterm elections, but the timeline is rapidly shrinking.
Welcome to another edition of State of Crypto, CoinDesk’s newsletter covering the intersection of digital assets and public policy.
A narrowing window
The Clarity Act was not enacted by July 4, despite earlier expectations from White House adviser Patrick Witt. With July already underway, the legislative window is beginning to close.
Why it matters
If the bill does not pass before the midterms, its future becomes far less certain. A shift in control of either chamber could lead to significant revisions, particularly as Democrats may seek to reshape the legislation. That makes the push for a 2026 passage increasingly urgent.
Where things stand
Despite the time pressure, insiders are not ready to rule the bill out. Several sources close to the process say there is still cautious optimism it can pass this year.
Although Congress is in session less frequently during the summer, much of the work is happening behind the scenes. Staffers continue negotiating key issues, including reconciling differences between Senate committee versions of the bill. Once aligned, the Senate would only need a short window to bring the bill to the floor.
According to those familiar with the process, the Senate vote itself could move quickly, potentially requiring only a few days to secure cloture and reach the 60 votes needed. The House could also act swiftly, though uncertainties remain.
Recent developments — including a ruling by the U.S. Supreme Court expanding presidential authority over independent agencies, and new financial disclosures from Donald Trump — are not expected to significantly disrupt negotiations.
Ethics concerns intensify
Trump’s latest financial disclosure reported roughly $2 billion in income for 2025, with about $1.4 billion tied to crypto-related ventures. He also disclosed holding more than $100 million in digital assets.
The revelations have strengthened Democratic calls for stricter ethics provisions in the Clarity Act. Senator Elizabeth Warren argued the legislation must prevent top officials and their families from profiting from the crypto industry.
Senator Ruben Gallego echoed similar concerns, stressing the need for enforceable safeguards before supporting the bill on the Senate floor, despite backing it at the committee stage. Lawmakers including Angela Alsobrooks have also indicated that stronger ethics rules are a prerequisite for broader support.
Negotiations over these provisions are ongoing and are expected to be resolved late in the process, with final approval still requiring presidential sign-off.
Broader legislative challenges
The Supreme Court’s recent decision allowing the president greater control over independent agency commissioners has also added complexity. Democrats continue to push for bipartisan representation at regulators such as the SEC and CFTC.
At the same time, broader dysfunction in Congress could slow progress. Reports suggest the House of Representatives is struggling to advance even procedural measures, raising concerns about its ability to move quickly on the bill.
Lawmakers are also juggling competing priorities, including another potential reconciliation budget bill and other major legislation. Even if Congress passes the Clarity Act, uncertainty remains over whether Trump would sign it, given delays on other bipartisan bills.
Key date to watch
The next major deadline is August 7, 2026, the final Senate session day before lawmakers leave for summer recess and campaign season. While Congress briefly returns in September, attention is likely to shift to other priorities, including the National Defense Authorization Act.
Bottom line
Momentum behind the Clarity Act remains, but time constraints, political tensions, and legislative gridlock are tightening the window. The coming weeks will be critical in determining whether the bill can advance before the midterms.
