Senate crypto bill faces make-or-break test as midterms and MiCA loom

The Senate will finally mark up the Clarity Act, but partisan rifts, Trump politics, and midterm pressure threaten to push comprehensive crypto rules into 2027.

The U.S. Senate is set to vote on comprehensive cryptocurrency legislation next week, with lawmakers remaining divided on major policy issues that could determine the bill’s fate, according to statements from Senate leadership.

Senate Banking Committee Chair Tim Scott announced he will bring the crypto market structure bill to markup on January 15, setting a firm deadline for negotiations that have stalled for months. The proposal closely resembles the Digital Asset Market Clarity Act passed by the House of Representatives in July.

The legislation aims to establish a federal regulatory framework for digital assets in the United States. If approved in committee, the bill would advance to the Senate floor. A committee failure would likely end prospects for passage this year, according to congressional observers.

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Scott stated that lawmakers have reviewed multiple drafts over the past six months and should be willing to vote on record, even without full agreement, adding that “at some point, accountability matters.” However, it remains uncertain whether the bill has sufficient support to clear committee or secure the 60 votes needed to overcome a potential filibuster.

Several Democrats and some Republicans have opposed the accelerated timeline, arguing that core issues remain unresolved. Supporters initially targeted passage by mid-2025, then October, and finally by year-end 2025. All deadlines were missed, reflecting the legislation’s complexity and political considerations as the 2026 midterm elections approach.

Bipartisan staff and White House officials this week examined what Republicans described as their final offer. A summary of the proposal shows several unresolved issues, including ethics rules related to conflicts of interest, restrictions on stablecoin yield products, quorum requirements at federal regulators, and provisions affecting decentralized finance.

Decentralized finance has emerged as a contentious issue, with cryptocurrency advocates seeking protections for developers and open-source software. Democrats have raised concerns about money laundering, sanctions evasion, and national security risks associated with broad safeguards, according to congressional sources.

The Clarity Act would divide oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, establishing tests to determine whether a digital asset qualifies as a security or commodity.

Industry reaction to Scott’s decision to force a markup has been divided. Some lobbyists have warned that proceeding without bipartisan consensus could jeopardize the bill’s chances. Others contend that a recorded vote is necessary to avoid repeating previous cycles in which House-passed cryptocurrency bills stalled in the Senate.

The political environment adds additional uncertainty. With midterm elections approaching, Democrats may be reluctant to support legislation linked to President Donald Trump, whose family’s reported involvement in cryptocurrency ventures has raised conflict-of-interest concerns, according to political analysts.

Analysts at TD Cowen warned that the bill faces increasing obstacles as lawmakers enter campaign mode, raising the possibility that final passage could slip to 2027.

Cryptocurrency companies, including Coinbase, have urged lawmakers to act, citing Europe’s Markets in Crypto-Assets framework and regulatory clarity in jurisdictions such as the United Arab Emirates as evidence that the United States is losing competitive ground. Some observers view the “final offer” as indicating negotiations are nearing an impasse rather than a breakthrough, making the upcoming vote a critical juncture for the legislation.