CLARITY Act Runs Out of Time, Will Congress Extend The Recess?

Clarity Act has just two working days left before the August recess starts. Senate Majority Leader John Thune did not file the required cloture motion, putting the bill at risk. Meanwhile, Republican Sen. Josh Hawley has become the first GOP senator to oppose the bill over banking concerns.

Despite this, some senator belive that a procedural vote remains possible this week.

No Cloture Filing For Clarity Act This Week

The biggest setback came after Senate Majority Leader John Thune chose not to file a cloture motion on Wednesday. Without that filing, the Senate can no longer follow its normal process to hold a vote before lawmakers leave for the August 10 recess.

Meanwhile, the delay has sharply reduced the bill’s odds of moving forward this week. 

Adding to the uncertainty, Republican Sen. Josh Hawley has announced he plans to vote against the CLARITY Act, becoming the first Republican senator to publicly oppose the bill after concerns raised by banking groups.

Under current Senate rules, the only remaining options are for senators to approve a unanimous consent agreement to fast track the bill.

White House Talks Offer Small Hope

Despite the setback, negotiations have not completely stopped. Republican Senator Thom Tillis and Democratic Senator Ruben Gallego have submitted a revised bipartisan proposal to the White House that focuses on the controversial crypto ethics provisions tied to the legislation.

According to Tillis, White House officials have now started reviewing the new proposal.

“We’ve got people working with the White House right now… They’re going through some of the lines right now.”

The ethics dispute has remained one of the biggest reasons why Senate Democrats have refused to support the bill.

Could the Senate Delay Its Summer Recess?

Some lawmakers believe Congress could stay in Washington beyond its scheduled recess if negotiations make progress.

Senator Cynthia Lummis said she expects senators may continue working into the weekend instead of leaving on Friday.

Ryan Wrasse, communications director for Sen. Thune, also said the Senate’s busy schedule could push lawmakers into next week.

Crypto Industry Continues Backing the Bill

Coinbase CEO Brian Armstrong rejected recent criticism from banking groups, saying lawmakers should judge the bill based on its actual content instead of claims made by bank lobbyists.

“You have to evaluate the proposal on the merits, and see if there is any evidence for such a claim, or if there might be other incentives the bank lobby has to falsely make this statement”

At the same time, prediction markets are becoming less confident. According to Kalshi, the chances of the Senate voting on the CLARITY Act before the August recess have dropped to just 10%, down from 22% earlier this week, showing that traders now expect the bill to be delayed even further.