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CLARITY Act Senate Path Narrows as Bipartisan Support Frays
Democratic Counterproposal, GOP Holdouts and Banking Objections Complicate Vote
TL;DR
- The CLARITY Act entered a critical Senate vote with its bipartisan coalition under pressure from both Republican and Democratic objections.
- Senate Democrats submitted a fresh counterproposal while banks and state attorneys general sought additional changes.
- Crypto executives urged lawmakers to advance the legislation, arguing that negotiators had already made substantial concessions.
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The CLARITY Act faced a sharply narrower path through the Senate on September 15, 2026, as Republican leaders tried to hold their conference together while securing enough Democratic support to advance the legislation. Senate Democrats submitted a counterproposal shortly before the expected procedural vote, while Republican holdouts, banking groups and state attorneys general continued pressing objections to the current text.
The immediate hurdle was a vote on whether to proceed with consideration of the bill rather than a final vote on passage. Republican leaders therefore needed support from Democrats even if their own conference remained united, while uncertainty around several Republican senators further complicated the count.
Sens. Susan Collins and John Cornyn had not committed to supporting the legislation ahead of the procedural vote. Collins raised concerns that the bill could accelerate deposit flight from community banks. Sen. John Curtis planned to support opening debate but drew a distinction between advancing the legislation procedurally and supporting it on final passage, saying the current version would not receive his final vote.
The White House intensified outreach to Republican senators as leaders tried to prevent banking-related concerns from causing additional defections. That left negotiators managing two problems at once: maintaining Republican support while also attracting enough Democrats to move the bill forward.
Democrats Submit New Proposal After Private Meeting
Democratic senators met on the evening of September 14 in the office of Senate Minority Leader Chuck Schumer and agreed to prepare another proposal for Republican negotiators. By the following day, the Democratic counterproposal had been delivered, according to three people familiar with the matter. Its specific requested changes had not yet been publicly disclosed.
Sen. Mark Warner said Democrats involved in the negotiations made another offer after concluding that the latest Republican package still did not adequately address their concerns. Republican aides had characterized the package produced over the preceding weekend as their “final” offer, but Democrats continued seeking changes.
One major dispute concerns ethics restrictions involving senior government officials. The latest Republican language included stronger provisions aimed at financial conflicts, but Democratic Senator Adam Schiff said the package remained insufficient. Schiff said the ethics measures “don't go far enough” and argued they likely would not apply to the first family while principally covering federal employees.
Schiff also objected that there were “just too many carveouts,” underscoring continuing disagreement over who should be covered and what exemptions should remain in the legislation.
Sen. Cynthia Lummis said Republicans and President Donald Trump had already accepted extensive Democratic requests on ethics. “It's becoming clear that some Democrats simply won't get to yes, no matter what we put in the text,” Lummis said.
Lummis said Trump had agreed to two ethics provisions requested by Democratic negotiators and accused Democrats of continuing to raise demands. “We've given you everything you’ve asked for, yet you keep holding the bill hostage, demanding more and more and more. It's beyond frustrating. There's nothing left to give.”
Banks and State Officials Press Separate Objections
The legislation also faced organized opposition from a bipartisan group of state attorneys general led by New York Attorney General Letitia James. They warned that the bill could weaken states' ability to investigate crypto fraud, enforce investor-protection rules and impose registration requirements on digital-asset businesses.
Their concerns focus in part on provisions that could expand the authority of the U.S. Securities and Exchange Commission in ways that could override state registration requirements. The attorneys general want Congress to preserve state powers to investigate misconduct, enforce applicable rules and maintain digital-asset registration regimes.
Banking groups raised a separate concern over competition for deposits. A joint letter sent on September 14 to Senate Majority Leader John Thune and Schumer argued that the Republican compromise still did not adequately protect traditional banks from customers moving money into stablecoin products that pay rewards or yield.
The current legislation includes a mechanism called a “Circuit Breaker” that would give the U.S. Treasury Secretary additional authority to restrict stablecoin rewards if substantial deposit outflows from community banks materialized. Banking groups said that approach would act only after the damage had occurred.
“A safeguard that is only activated after substantial deposits have already flowed out is no safeguard at all,” the banking associations said. They are seeking stronger statutory language aimed at closing provisions that could allow stablecoin providers to make payments economically resembling interest on customer balances.
Those banking concerns also overlap with Collins' objections and add another source of pressure on Republican senators weighing the bill.
Crypto Executives Urge Senators to Advance Bill
Crypto executives mounted a final push for passage by arguing that Democratic negotiators had already secured extensive changes to the legislation.
Coinbase Chief Policy Officer Faryar Shirzad said the current bill satisfies the principles Democratic senators had previously laid out for acceptable digital-asset market-structure legislation. Those areas included regulatory jurisdiction, issuer oversight, illicit-finance safeguards, conflicts of interest and consumer protection.
“Democratic negotiators played a major role in getting it here,” Shirzad said. “They should vote for it.”
Ripple Chief Executive Brad Garlinghouse also urged lawmakers to advance the bill, saying, “Perfect can't be the enemy of good.”
The industry has sought federal legislation that would establish clearer responsibilities and operating rules for digital-asset businesses, but the coalition behind the CLARITY Act was under pressure from several directions as the Senate vote approached.
Some House Democrats who previously supported crypto legislation have also become concerned that major crypto-industry-backed super PACs may decline to support them in upcoming elections despite their earlier votes. That concern has added an electoral dimension to the broader debate over industry political support.
A successful procedural vote would only begin Senate consideration rather than complete the legislative process. Senators could spend much of the remainder of September negotiating and voting on amendments involving ethics, banking, stablecoin rewards and other contested provisions before any final-passage vote.
Lummis warned that failure to move the bill forward would “drive the digital asset industry overseas, leave consumers vulnerable, and sideline American [crypto] leadership.”
This article has been refined and enhanced by ChatGPT.
