Gallego Slams GOP CLARITY Ethics Plan, Vows Counterproposal

The CLARITY Act is intended to establish a US regulatory framework for digital assets and is a key piece of legislation governing the cryptocurrency and fintech markets. Its passage would give Web3 companies and digital asset trading clear compliance guidelines and directly shape the global fintech industry, drawing close attention from the blockchain sector, technology investors and Wall Street financial institutions worldwide.

The latest Polymarket data from July 2026 showed that the probability of the bill passing by year-end had fallen to a record low of 32%. The main obstacle is that US Democrats and Republicans have yet to agree on ethics provisions addressing government officials’ conflicts of interest involving digital assets. With Congress approaching its August recess, the legislative window before year-end continues to narrow, further dimming the bill’s prospects.

The US Congress is considering the CLARITY Act, which seeks to clarify regulatory responsibilities for digital assets and trading platforms and reduce legal uncertainty for crypto companies. Senator Cynthia Lummis says clear rules are critical to bringing businesses back to the United States and preserving the country’s leadership in financial technology.

Lummis warned that this week could be the United States’ last critical opportunity to advance the CLARITY Act before 2030. She said China could otherwise write the rules for a new financial era. Negotiations have continued since the Senate returned, but Democrats and Republicans remain divided over provisions covering lawmakers’ ethics and safeguards against bad actors. A vote on crypto market structure could take place as early as August.

The CLARITY Act seeks to define how oversight of crypto assets should be divided between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission, making it a key piece of legislation for establishing federal market rules. The bill remains stalled over stablecoin yield provisions, with the crypto and banking industries still divided over interest, rewards and the impact on competition for deposits.

Republican Senator Thom Tillis urged the Senate Banking Committee to delay its review until May to allow more time for negotiations. The committee subsequently scheduled a markup for May 14, while Chairman Tim Scott had hoped to finish the process by May 21. However, the July 4 deadline passed without the bill clearing the hurdle, raising concerns that it may not pass before the November midterm elections.