CLARITY Act faces July hearing; needs seven Democratic votes

A July 17 field hearing in New York will provide public testimony on the CLARITY Act as Senate negotiators continue to seek votes ahead of a floor test. Final approval in the Senate requires 60 votes to invoke cloture and proceed to a final vote.

The CLARITY Act cleared the House in July 2025, with 78 Democrats joining the majority. The bill was split for Senate consideration: the Agriculture Committee advanced the Digital Commodity Intermediaries Act portion on Jan. 29, while the Banking Committee handled the Securities and Exchange Commission-facing text and approved the CLARITY language 15-9 in a May 14 markup.

All 13 Republicans on the Banking Committee voted yes. Democrats Ruben Gallego and Angela Alsobrooks joined them, but both conditioned their committee support on further negotiations before committing to a Senate floor vote.

Sen. Alsobrooks has withheld floor support until the bill includes a provision covering government officials’ crypto holdings. Other Democrats have pressed for stronger anti-money-laundering language. Sen. Jack Reed filed about 20 amendments before the May 14 markup.

Analysts and financial firms have narrowed the bill’s odds on the Senate calendar. Alex Thorn cut his 2026 passage estimate from 75% to 60% on June 5, citing lost floor time to other priorities. Stifel’s Brian Gardner wrote that a realistic path requires the bill to clear the Senate by the end of July and warned that missing the recess would see prospects “deteriorate materially.”

With Republicans holding roughly 53 seats, the Senate needs Gallego, Alsobrooks and at least five more Democratic senators to reach 60 votes. That arithmetic remained unresolved heading into the July 17 hearing.

Section 404 is the bill’s most contested market provision. It bars digital-asset service providers from paying interest or yield solely for holding a payment stablecoin while allowing activity-based rewards tied to transactions, platform use, loyalty programs, staking and other ecosystem participation. The provision leaves disclosure rulemaking to the SEC and the CFTC.

Six banking trade groups, including the American Bankers Association and the Bank Policy Institute, argued the language was insufficient and sought tighter technical limits to prevent interest-like products that could draw deposits away from banks. The crypto industry largely accepted the Tillis-Alsobrooks compromise text, but disagreements produced more than 100 amendments before the committee vote.

A housing provision that had been included in the CLARITY draft was split into the 21st Century ROAD to Housing Act. The Senate approved that housing package 85-5 on June 22 and the House approved it on June 23, sending the bill to the president.

Sen. Cynthia Lummis described an August recess floor vote as more realistic and warned that “a 2026 failure would push the next viable legislative opening to 2030.” If cloture is not achieved before the recess, the bill would return to a crowded fall calendar.

The July 17 hearing will give industry groups, regulators and lawmakers a public forum to present views. Final passage will depend on whether negotiators can secure the additional Democratic votes needed to reach 60 for cloture.