As Europe and the UK celebrate crypto regulatory milestones, the US CLARITY Act stalls
The Clarity Act has missed its 4 July signing target, delaying what many expected to be the most significant piece of US crypto legislation to date.
Earlier this year, White House adviser Patrick Witt said the current administration was aiming to have the bill signed into law by Independence Day as part of the country’s 250th anniversary celebrations. However, the deadline has now passed, with negotiations continuing in the Senate.
There is a new deadline set for 7 August, which is the Senate’s final scheduled working day before lawmakers leave Washington for the Summer.
US President Donald Trump has pushed for the CLARITY Act to move quickly through Congress as part of an ambition to make the country the crypto capital of the world, but the bill still has to overcome several hurdles before it can reach the White House.
The Clarity Act must clear Senate debate and secure enough votes to invoke cloture and pass a final vote in the chamber. It would then return to the House of Representatives before being signed into law by the President.
Senate staff are currently working through the differences between the versions of the bill approved by the Senate Banking and Senate Agriculture committees.
Why the Clarity Act missed the deadline
One issue that still needs to be addressed is a three-way policy divide over how far the legislation should go in defining crypto market structure, with disagreements over ethics, enforcement and jurisdiction.
Democrats have pushed for enforceable restrictions on politicians and their families holding or profiting from digital assets while deciding on regulation. Republicans have resisted targeted language, arguing the rules should be neutral and not single out individuals or administrations.
There are also outstanding differences between the Senate Banking and Senate Agriculture Committee versions of the bill, particularly around how digital assets are classified and which regulators would oversee different parts of the market.
Those divisions reflect how the legislation evolved during its May committee stage, when the bill advanced in a 15-9 vote.
While two Democrats crossed the aisle at that point, including Senators Angela Alsobrooks and Ruben Gallego, they have since suggested their support on the floor is conditional on further changes.
Alsobrooks in particular warned that her backing depended on continued “good faith” negotiations, identifying ethics, law enforcement concerns and inter-committee alignment as unresolved issues that would need to be addressed before final passage.
Europe and the UK move ahead on clarity
While the US undoubtedly leads in terms of market activity, with US-dollar stablecoins such as USDT and USDC accounting for the majority of global volume, regulatory pressure is being applied by the UK and Europe.
In Europe, the Markets in Crypto-Assets (MiCA) regime reached a milestone on 1 July, when the final transitional period ended and full licensing requirements came into force across the continent.
Only authorised crypto asset service providers are permitted to operate across the European Union, with firms gaining the ability to scale across all 27 member states under a single regulatory framework.
In the UK, regulators set out how digital assets will be treated within the financial system. Last month, the Financial Conduct Authority unveiled its approach to cryptoasset regulation as part of a framework developed with the Bank of England.
Although full implementation is not expected until 2027, firms received some clarity on the direction of travel, with requirements covering capital buffers, redemption rules and backing asset standards for stablecoin issuers.
