CLARITY Act Struggles to Win Full Republican Support Ahead of May Markup

TLDR

• Senate Banking Committee Chair Tim Scott wants all 13 Republicans on board before marking up the CLARITY Act
• Sen. John Kennedy is withholding support, partly over frustration with a stalled housing bill
• Sen. Thom Tillis pushed for a mid-May markup but wants ethics language included
• Unresolved issues include stablecoin rewards, DeFi concerns, and Trump’s crypto ties
• One industry source puts the bill’s chances of passing at just 15–25%

The CLARITY Act, a broad crypto market structure bill, is edging toward a possible Senate committee vote in May. But key Republican holdouts and unresolved disputes are slowing progress.

Senate Banking Committee Chair Tim Scott said he wants all 13 Republicans on his committee behind the bill before moving forward. He confirmed that Sen. Thom Tillis and a few others are now on board, but full support is still out of reach.

Scott told Fox Business that lawmakers are in the “red zone” to get a deal done. He said his goal is a bipartisan markup in May, followed by a Senate floor vote in June or July.

Sen. Tillis, a key Republican negotiator, asked Scott to schedule a markup and said he hoped to have updated bill text ready a few days before it. But Tillis also drew a firm line, saying he would oppose the bill if it leaves the Senate without ethics provisions.

Sen. John Kennedy is among those still withholding support. According to Punchbowl News, Kennedy’s reluctance stems partly from frustration with the House and White House over a stalled Senate housing bill — not just the crypto legislation itself.

Ethics and Trump Ties Are Complicating Talks

Democrats have made ethics a central issue. Sen. Angela Alsobrooks said that if lawmakers want a bipartisan committee vote, illicit finance and ethics concerns must be resolved first.

Chair Scott has said he does not believe ethics provisions fall under his committee’s jurisdiction. That leaves the issue unresolved and potentially requiring action elsewhere before a full Senate vote.

Trump’s crypto involvement has intensified the debate. Bloomberg estimated Trump has earned at least $1.4 billion from crypto ventures, including through the DeFi and stablecoin project World Liberty Financial. The Trump family also holds a 20% stake in mining firm American Bitcoin.

Last weekend, Trump hosted a gala at Mar-a-Lago for holders of the TRUMP memecoin, drawing criticism from Democratic lawmakers.

The House passed its own version of the bill, called Clarity, which includes a line barring members of Congress and senior executive branch officials from issuing digital commodities while in office. That language is a red line for the White House.

Stablecoin Rewards and DeFi Still Unresolved

Beyond ethics, the bill has stalled over how to handle stablecoin rewards. Public disagreements between a key White House crypto advisor and banks have played out openly.

DeFi language is also under scrutiny. Lawmakers and law enforcement groups are concerned that certain developer protection provisions could make it harder to prosecute financial crimes.

Senate Judiciary Committee Chair Chuck Grassley is in active talks with Sen. Cynthia Lummis to address those law enforcement concerns.

The bill faces a hard deadline. The Senate goes into a five-week recess in August ahead of midterm elections. If the bill does not clear the committee and reach the floor before then, its path forward narrows sharply.

One crypto industry source estimated the bill’s chances of passing this year at 15% to 25%. Research firm Galaxy put the odds somewhat higher, at around 50%.

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