U.S. Crypto Legislation Gains New Momentum in Senate as CLARITY Act’s Passage Odds Climb to 35%
After nearly a month of stagnation, the long-anticipated U.S. crypto regulatory bill—known as the CLARITY Act—has regained traction in the Senate. The legislation, which aims to establish a comprehensive framework for digital asset regulation, is now showing signs of real progress, with its chances of passing this year rising to 35%, up from just 15% earlier in the month. This resurgence has sparked cautious optimism across the crypto industry and among lawmakers.
The recent revival of bipartisan discussions was reportedly catalyzed by key meetings between leading figures in the digital asset space and influential senators. One of the main roadblocks had been a leaked proposal from Senate Democrats that sought to regulate decentralized finance (DeFi) in a way that many in the crypto sector found overly restrictive. This proposal, led by Senator Reuben Gallego, triggered a temporary breakdown in bipartisan cooperation, prompting Republicans to withdraw from negotiations.
However, with the intervention of crypto industry leaders who facilitated dialogue between the two political factions, talks have resumed. Senate Agriculture Committee Chair John Boozman (R-Ark.), whose committee has jurisdiction over digital assets categorized as commodities, expressed optimism about the bill’s trajectory. He announced plans to finalize the committee’s portion of the legislation and present a bipartisan draft “very, very soon,” with the goal of advancing it before Thanksgiving.
Boozman’s counterpart, Banking Committee Chair Tim Scott, also confirmed that bipartisan engagement on the issue had restarted. His office noted that Senator Scott is “encouraged” by the renewed discussions and is eager to help shape meaningful regulatory policy for the digital asset ecosystem.
If the current momentum holds, the bill could proceed to a full Senate vote following the committee markup. From there, it would head to the House of Representatives, where it would need to be reconciled with an earlier version of the CLARITY Act before final passage. Lawmakers are racing against the clock, as the looming midterm elections threaten to derail progress if consensus isn’t reached by year-end.
Despite political uncertainty and a recent month-long government shutdown, the crypto market responded positively to the legislative developments. According to prediction platform Polymarket, the probability of the CLARITY Act passing in 2024 jumped to 35% following the legislative update.
Still, some analysts warn that the process could bleed into early next year, especially if election campaigning intensifies partisan divides. The bill’s fate may ultimately hinge on whether lawmakers can maintain bipartisan cooperation amid increasing political pressure.
The CLARITY Act is seen as a pivotal piece of legislation for the future of the U.S. digital asset industry. It seeks to define the regulatory responsibilities of agencies like the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), aiming to eliminate the current regulatory gray zones that have led to confusion and enforcement inconsistencies.
Beyond agency jurisdiction, the bill also attempts to provide clear definitions for key crypto terms, such as “digital commodity,” “digital security,” and “stablecoin.” This clarity is crucial for fostering innovation in the blockchain space while ensuring adequate consumer protection and market integrity.
The renewed push for the CLARITY Act also reflects a broader global trend: governments are increasingly recognizing the need to integrate digital assets into their regulatory frameworks. The U.S., despite being a global leader in finance and technology, has lagged behind regions like the European Union, which has already rolled out comprehensive crypto legislation under its Markets in Crypto-Assets (MiCA) framework.
Domestic pressure is also mounting. Several U.S. states have begun implementing their own crypto rules in the absence of federal guidelines, creating a patchwork of regulations that complicates nationwide compliance for blockchain companies. The CLARITY Act could establish a unified set of standards, reducing regulatory fragmentation and encouraging innovation.
Investors and companies in the blockchain sector are particularly hopeful that a federal law would also offer a safe harbor period, during which startups could develop new technologies without the immediate threat of enforcement action. Such provisions could be instrumental in keeping the U.S. competitive in the global crypto economy.
Another critical aspect of the CLARITY Act is its approach to decentralized finance. After backlash to earlier proposals, lawmakers are reportedly working on a more balanced framework that acknowledges the unique characteristics of DeFi protocols, such as their open-source nature and lack of centralized intermediaries. If successful, this could pave the way for legal recognition of decentralized systems without undermining their core principles.
Additionally, the bill aims to improve transparency and investor protections in the crypto markets. It includes provisions for mandatory disclosures by crypto issuers, anti-money laundering compliance, and clear guidelines for token classification. These measures could build trust among institutional investors and encourage broader adoption of digital assets.
While optimism is growing, success is far from guaranteed. The legislative schedule remains tight, and political priorities could shift quickly as the election season intensifies. Still, the current progress marks a significant shift in Washington’s approach to crypto regulation—from reactive enforcement to proactive policymaking.
If lawmakers can bridge the partisan divide and pass the CLARITY Act by the end of the year, it would represent a historic step toward integrating digital assets into the U.S. financial system under a clear and consistent legal framework.