The fight over the CLARITY Act, Congress's flagship crypto market-structure bill, turned openly hostile this week. Coin Bureau reported that Senator Cynthia Lummis accused banks of actively working to block the bill after they demanded GENIUS Act stablecoin changes be folded in, then fired the lobbyists who had negotiated a compromise text and are now pushing for a do-over. Senate Banking Chairman Tim Scott went further, as Coin Bureau captured, framing the delay as a partisan blockade.
Elizabeth Warren's team wants to run crypto out of the country. Period.
Banks Walk Back a Deal
The banking industry's objection centers on a narrow but consequential provision: the American Bankers Association wants the bill to close what it calls a loophole allowing stablecoin issuers to pay yield that functions like bank interest, something Section 404 of the current text is meant to bar outright. Lummis has pushed back directly on community banks' argument that stablecoins are driving deposit flight, arguing the bill's yield restrictions already protect their deposit base, but the reversal by bank lobbyists after a negotiated compromise was reached has scrambled the legislative math heading into the fall session.
A Bill That Doubled in Length
The legislative text itself has ballooned under the weight of competing demands. Coin Bureau's reporting put the CLARITY Act at under 300 pages originally, swelling past 600 after Democrats demanded more than a hundred changes. Ethics language meant to prevent senior officials, including President Trump, from profiting off crypto remains unresolved, alongside disputes over DeFi treatment and anti-money-laundering provisions that Senate Banking Committee members have flagged as the hardest remaining sticking points.
Related: Crypto's Regulatory Week: SEC Rulebook, CLARITY Act Fight, WH Push
Armstrong's September 15 Deadline
Coin Bureau also noted Coinbase CEO Brian Armstrong pressing the Senate to act, pointing out that most G20 nations already regulate crypto trading and calling the US "a major outlier" now that the UK has passed its own framework. The bill is scheduled for a procedural cloture vote on September 15, which requires 60 votes to advance, meaning the current standoff between reversing bank lobbyists and unresolved ethics language leaves the outcome genuinely uncertain heading into the vote.
