US Senate Delays Passage of CLARITY Act Leaving Crypto Industry and Investors in Washington Scrambling for Regulatory Certainty

The crypto industry in the United States is watching nervously as the long-anticipated CLARITY Act lingers in Congress.

Originally intended to provide a clear regulatory framework for digital assets, the bill has faced political roadblocks, industry objections, and procedural delays that have left the market impatient.

From decentralized finance (DeFi) to stablecoins, the law is set to define who regulates what in the digital asset space—and investors are eager to see it finalized.

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Origins of the CLARITY Act

The journey began in May 2025, when House Financial Services Committee Chairman French Hill introduced the CLARITY Act.

Its stated goal was straightforward: create clear rules for digital asset participants, balance innovation with consumer protection, and provide certainty for an industry often navigating murky regulations.

By June and July, the House moved unusually quickly, passing the bill on July 17 with a 294-134 vote.

While all Republican members in favor supported the bill, Democrats were split—78 voted “yes” while 134 opposed it, leaving the legislation with only partial bipartisan backing.

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Senate Debate Hits Political and Industry Snags

Once in the Senate, progress slowed dramatically.

Republicans favored a bespoke framework for crypto that distinguished digital asset securities from commodities, while many Democrats, including Senator Elizabeth Warren, pushed for tighter oversight, ethical safeguards, and DeFi regulations that largely relied on existing financial frameworks.

The discussion was further complicated by the government shutdown from October to November 2025, which stalled committee work.

During this period, debates raged over which federal agency—the SEC or CFTC—would supervise digital assets, and whether stablecoin interest products would be permitted.

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Industry Concerns Add Pressure

The crypto sector itself has not been quiet.

Coinbase CEO Brian Armstrong publicly opposed the bill, citing its restrictions on stablecoin yields and the proposed regulatory authority of the SEC.

Even banking executives, like Goldman Sachs CEO David Solomon, voiced concern, emphasizing that the legislation required careful revision.

The delays have had real-world consequences.

Data from CoinShares suggests that nearly $1 billion has flowed out of the crypto market amid uncertainty, highlighting how regulatory ambiguity can affect liquidity and investor confidence.

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High-Level Negotiations Continue

In February 2026, high-level talks resumed at the White House and in congressional corridors.

Industry leaders, including Ripple’s chief legal officer Stuart Alderoty, have been meeting with lawmakers to iron out differences.

These sessions aim to balance innovation, consumer protection, and political feasibility before the 2026 midterm elections.

Crypto lobbyists are also ramping up political influence, with PAC contributions shaping lawmakers’ positions.

Timing is critical: delays could leave the industry facing a lame-duck president and an incoming Congress less favorable to crypto-friendly policies.

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The Stakes for the US Crypto Market

For US crypto exchanges, DeFi platforms, and stablecoin issuers, CLARITY is more than legislation—it’s a roadmap for how they can operate safely and confidently.

Without it, ambiguity remains, legal risks persist, and cross-border competitiveness may be weakened as Europe and Asia roll out their own digital asset frameworks.

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What’s Next?

The next months are crucial. Senate committees plan additional markup sessions to reconcile party differences and address industry feedback.

Key points under negotiation include:

• Stablecoin yield rules that satisfy both crypto firms and banks

• Agency oversight split between the SEC and CFTC

• DeFi-specific regulations that balance innovation with consumer safety

• Ethics and anti-bailout provisions

Investors and companies alike are watching closely, hoping that Congress finalizes a framework that allows the US to retain its global leadership in digital assets.

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Summary

The US CLARITY Act, designed to regulate crypto and DeFi, has faced delays due to political disagreements, industry opposition, and government shutdowns.

The bill seeks to define regulatory authority, stablecoin rules, and compliance standards.

Crypto firms like Coinbase have objected to provisions limiting interest on stablecoins, while lawmakers remain split on oversight and ethics clauses.

High-level discussions continue in Washington, and the outcome will shape the future of US digital finance, market stability, and investor confidence.