American politicians have been considering a law for months that should provide clarity for the crypto sector. The so-called CLARITY Act was quickly passed by the House of Representatives in July 2025, but has since been stalled in the Senate. How long will a breakthrough wait?
Democrats and Republicans clash over crypto law
More than six months after approval by the House of Representatives, there is still no agreement in the Senate. The cause: political division. Democrats argue for stricter rules and ethical standards, while Republicans want to focus on more flexible policies.
The CLARITY Act should establish clear rules for the American crypto sector for the first time at a national level. The law determines who supervises the Securities and Exchange Commission (SEC) or Commodity Futures Trading Commission (CFTC), whether cryptos are considered securities or commodities, what rules apply to decentralized finance (DeFi) and how consumers are better protected.
Democrats argue for stricter control of the crypto sector. They want clear ethics rules, such as a ban on members of Congress from trading in crypto themselves. President Trump’s involvement in the sector is being viewed with suspicion.
They also believe that there should be no government support or rescue operations in the event of a possible crypto crisis. In addition, they are committed to stricter tax rules and stricter measures against money laundering.
Republicans want a new, innovation-friendly regulatory framework that fuels the growth of the crypto sector. They argue for less power for the Securities and Exchange Commission (SEC), which they believe is too strict and restrictive. Instead, there must be more room for companies to innovate.
Crypto clashes with traditional financial sector
There is division not only in politics, but also within the financial sector. Major crypto companies such as Coinbase oppose the ban on interest on stablecoins and against an overly dominant role for the SEC.
In January, Coinbase withdrew from the consultation at the last minute, which led to a delay in the Senate.
The traditional banking sector strongly opposes interest on stablecoins. They see this as a threat, because savers can withdraw their money from banks and switch to interest-earning stablecoins.
The clock is ticking towards the elections
The pressure to reach an agreement is increasing, especially with the American midterm elections of November 2026 in sight. Lawmakers want to achieve results before then, but time is running out.
After the election, the balance of power could shift, potentially weakening the CLARITY Act or taking it off the table altogether.
Still, expectations are mixed. Ron Hammond, executive at trading firm Wintermute, estimates the chance that the law will be passed this year at only 25 percent.
Stuart Alderoty, Ripple’s chief legal officer, is slightly more optimistic. On X he wrote that a compromise is within reach, but that “we must act now, while we still can.”
Confidence has also increased on the decentralized prediction platform Polymarket. In January, the chance that the proposal would be approved in 2026 was still 40 percent, but users now estimate that chance at 54 percent.
Source: https://newsbit.nl/clarity-act-loopt-vast-crypto-strijd-tussen-democraten-en-republikeinen/
