US CLARITY Act Effectively Stalls This Year as Crypto Industry Looks to New Congress

Prospects for Congress to pass US crypto market-structure legislation this year have all but collapsed, shifting the industry's focus to the new Congress next year and regulatory action by financial agencies.

CoinDesk reported on November 15 that US crypto industry officials see little chance of major digital-asset bills passing during the lame-duck session that runs through year-end after the midterm elections. In particular, legislative talks on the CLARITY Act, which addresses market-structure regulation, have stopped. The remaining calendar for the session is also tight.

Cody Carbone, chief executive officer of the Digital Chamber, said meaningful progress on crypto legislation this year is difficult to expect. Congress has a range of other issues to address. There is also a growing mood among lawmakers against continuing debate on the CLARITY Act.

Shifts in congressional power after the midterm elections are also sapping momentum for legislation. With Democrats set to secure the upper hand in the next Congress, Republicans are poised to focus the remaining period on confirming key nominees. Democrats likewise have little incentive to rush into legislative compromise with Republicans before the new Congress begins.

That has led the crypto industry to focus on the makeup of the Securities and Exchange Commission and the Commodity Futures Trading Commission. President Donald Trump recently nominated two candidates to each agency, and the Senate is moving ahead with the confirmation process before year-end. Financial policy analyst Jaret Seiberg said the nominees have a high chance of being confirmed before the current session of Congress ends.

Kristin Smith, head of the Blockchain Association, said time is limited to move crypto bills during the remaining session. At the same time, she added that regulations now being prepared by the SEC and the CFTC could have a more important effect on the industry. The two agencies are set to remain under Republican leadership until early 2029, when Trump's term ends.

Still, some individual bills could pass this year. A bipartisan measure to shorten federal permitting procedures for infrastructure such as data centers is a leading example. The Bitcoin mining industry views shorter permitting timelines positively, though opinions are split over the cost of grid expansion and the burden of energy rates.

The industry expects the new Congress next year to revisit the crypto tax framework, the CFTC's authority over spot markets, and rules related to illicit-finance prevention and stablecoin rewards. Smith said about one in four members of the next Congress will be newcomers, and her group plans to focus on improving their understanding of the crypto industry.