The long-awaited CLARITY Act has been stalled in Congress since January, mainly due to controversies regarding stablecoin rewards. Those involved in negotiating the cryptocurrency bill said throughout the month that progress is on the rise, and May will likely represent a major turning point in the Senate.
However, recent policy a report He points out that the biggest hurdle may no longer be including language specific to stablecoins. Instead, Democrats are vowing to block progress unless a bipartisan agreement is reached on ethics provisions, specifically restrictions aimed at preventing Trump from engaging in cryptocurrency activity.
Crossroads Clarity Law
Sen. Ruben Gallego, a Democrat who supports the sweeping legislation and has worked on ethics negotiations, summed up the leverage Democrats are using. As he said, there is “no final bill” and “no final action” unless the ethics issue is agreed upon in a bipartisan manner.
The ethical debate for the CLARITY Act has become more urgent as the Trump family’s cryptocurrency companies are at the center of growing frustration among lawmakers on the left.
These companies are described as representing more than $1 billion of the family’s wealth, and critics say the digital asset industry’s “light regulatory regime” could enrich the first family.
The White House has repeatedly said there is no conflict of interest for the president. Senate Republicans have also largely defended him against attacks linked to his family’s cryptocurrency holdings. However, both parties seem to realize that reaching an agreement is necessary to pave the way for the bill.
According to the report, there is a shared awareness that if Republicans lose either chamber of Congress, the industry’s long-standing push to restructure oversight — dividing responsibilities for cryptocurrency trading among Wall Street regulators — will become more difficult to achieve.
At this point, it remains uncertain whether Democrats will be able to secure an arrangement acceptable to both Senate Republicans and the White House — particularly one that would significantly limit the Trump family’s involvement in the cryptocurrency business.
The battle of ethics becomes the last major hurdle
Another complication is the legislative process itself. Republicans on the Senate Banking Committee said they want to move forward with the CLARITY Act in the coming weeks, but the ethics battle is described as one of the last outstanding issues needed for the bill to gain broader bipartisan support.
Because ethics policy falls outside the scope of the Banking Commission’s jurisdiction, the Commission’s CLARITY Act coding is not expected to include ethics language.
However, Gallego said there needs to be clarity before the cryptocurrency bill reaches the bottom line — specifically, a “clear explanation” of how ethics provisions will be handled and incorporated by the time of tokenization.
Featured image from OpenArt, chart from TradingView.com
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