The Senate today voted 50-49 against ending debate on the Clarity Act, leaving the fate of the bill uncertain in the current Congress.
A cloture vote is a procedural motion that still allows the bill to be amended before a final vote. By failing to reach the 60-vote threshold needed for cloture, senators signaled their unwillingness to pass the legislation in its current form.
The Senate is currently scheduled to remain in session until early October, then will be in recess until after the midterm elections.
Democrats pressed for stronger ethics language preventing officeholders and their families from profiting from crypto-related ventures. Three Republicans – Sens. Collins (R-Maine), Hawley (R-Mo.) and Moran (R-Kan.) – joined Democrats in voting against cloture. Sen. Thom Tillis (R-N.C.) changed his vote from yes to no and entered a motion to reconsider cloture. The move allows the Senate to potentially reconsider the bill later this year.
The American Bankers Association and others have urged lawmakers to use the Clarity Act to close a legal loophole that allows digital asset service providers to avoid the existing prohibition on stablecoin interest and yield. In recent days, the bill’s supporters offered language allowing regulators to promulgate rules to close the loophole, but only if the Treasury Secretary determines within 18 months of passage of the bill that stablecoins have had a “substantial detrimental impact” on community banks.
ABA and other banking groups believe the proposed “regulatory circuit breaker” is inadequate as it would only go into effect after substantial deposit flight has occurred. In a statement after the vote, the associations said they continue to support creating a strong, durable regulatory framework for digital assets that will set the course for U.S. global leadership for decades to come.
“We believe Congress can accomplish that goal while protecting the bank lending that drives economic growth,” the associations said. “As lawmakers consider next steps, we encourage them to adopt targeted changes to stablecoin yield policy. We stand ready to work with all stakeholders to achieve this important goal.”
