The Senate Has 8 Weeks to Pass a Crypto Bill — or Wait Until 2030

TLDR

• The Blockchain Association held a town hall to argue the Clarity Act strengthens law enforcement tools against crypto crime
• Senator Cynthia Lummis warned the bill must pass this year or wait until around 2030
• A group of Senate Republicans urged financial regulators to create fairer capital rules for banks holding crypto
• Critics say the Blockchain Association used former law enforcement officials who now work for crypto firms to lobby senators
• The bill needs 60 Senate votes and has under eight weeks of floor time before summer recess

The U.S. Senate is working to pass a major crypto regulation bill before midterm elections slow things down. The bill, called the Digital Asset Market Clarity Act, would set rules for how the SEC and CFTC oversee crypto markets.

The Senate Banking and Agriculture Committees have each passed their own versions of the bill. The full Senate still needs to merge those versions before a final vote.

Law Enforcement Concerns Slow Progress

One of the biggest sticking points is how the bill handles illicit finance. Several Democratic lawmakers have held back their support while some law enforcement groups have been reluctant to back the bill.

The Blockchain Association held an online town hall Thursday to address those concerns. The group also released a letter from 160 former law enforcement officials supporting the bill.

Critics pushed back quickly. The Revolving Door Project said many of those officials now work for crypto companies. The group accused the Blockchain Association of trying to mislead senators.

Senator Lummis defended the bill’s current language. She said it allows prosecutors to go after developers who publish code “with the specific intent” that it be used for money laundering.

Patrick Witt, the White House’s chief crypto adviser, said the bill puts “real regulatory constraints” on businesses that currently operate without clear rules.

Republicans Press Regulators on Bank Capital Rules

Separately, Senator Lummis led a group of Senate Republicans in sending a letter to three federal regulators on May 27. The letter went to the Federal Reserve, the FDIC, and the Office of the Comptroller of the Currency.

The senators asked regulators to update capital rules for banks that hold crypto. Current international standards require banks to hold reserve assets worth more than their crypto holdings.

The senators called this a “de facto ban” on banks holding digital assets. They said the Basel Committee’s 1,250% risk weight for crypto was not based on a realistic assessment of actual risk.

Senators Dan Sullivan, Bill Hagerty, Bernie Moreno, Ted Budd, and Jon Husted also signed the letter.

The group said any new capital rules should reflect the real risks of digital assets and give banks a fair chance to participate in crypto markets.

The Clarity Act, if passed, would allow banks to use digital assets for payments, lending, custody, and trading.

Lummis stressed that the Senate has fewer than eight weeks of floor time before summer break. After that, midterm campaign season begins and the chances of passing the bill drop sharply.

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