US banking trade group Bank Policy Institute (BPI) has spoken out against the newly released draft CLARITY Act, citing key gaps.
BPI said in a statement on Thursday (July 23) that there were still “shortcomings” regarding the bill’s stablecoin yield and illegal financing provisions and that they needed to be “strengthened.”
The banking sector opposed the previous practice stablecoin yield settlement this allowed incentives based solely on account activity, not empty balances.
This passive income ban was intended to address banks’ concerns about capital flight. Reconciliation is addressed in the new draft (Section 404).
Unfortunately, the banking industry has called for a complete ban on any stablecoin returns or incentives.
Unsurprisingly, the banking industry lobbied some lawmakers, including Sen. John Curtis (R-Utah) and Sen. John Cornyn (R-Texas), who shared banks’ concerns about the crypto bill.
Will the CLARITY Act get the required 60 votes?
This is bad news for Republicans and the crypto industry.
Before Sen. Lindsey Graham’s death this month, Republicans had 53 members. Additionally, another member, Kentucky Senator Mitch McConnell, had been ill for more than a month, bringing the membership to 51.
If Senators Curtis and Cornyn do not support the bill, Republican support will drop to 49.
In other words, they would need 11 Senate Democrats to support the bill to clear the 60-vote threshold. Unfortunately some pro-crypto Democrats like Senator Angela Alsobrooks and Ruben Gallego opposed the bill due to inadequate provisions regarding ethics and illegal finance, among other issues.
This complicates the 60-vote target if an agreement cannot be reached to overcome all major disagreements. Moreover, the timing and the Majority Leader’s perspective do not help the bill move forward.
There are only two weeks until the Senate recesses for its August recess. Many analysts have warned that if the bill is not passed by August, it will be as good as dead.
US Senate Majority Leader John Thune warned that the bill may not pass before the August recess.
I don’t think we can achieve these. I would at least like to launch Clarity. We’ll see where the votes are.
In response, White House Chief Crypto Advisor Patrick Witt urged Thune to plan the vote and stop waiting for Democrats.
You’ll be waiting forever (for Democrats). No one thought we could produce an ethical ruling with real teeth; This included the President.
According to Witt, the new ethics provision addresses Democrats’ concerns.
Market expectations for the bill to pass in 2026 briefly dropped to 32% on Friday. It remains unclear whether pass rates will improve over the next two weeks.
Final Summary
- Provisional Senate support for the crypto bill has fallen below 50.
- Majority Leader John Thune doubted the CLARITY Act’s chances of becoming law before the August recess
