Senate GOP Drops New Crypto Bill Draft As Odds of Passing Stagnate
The Senate Agriculture Committee launched on Wednesday an up to date draft of the crypto market construction invoice, which builds on the CLARITY Act passed by the House and referred to the Senate in September 2025. The invoice seeks to ascertain a U.S. regulatory framework for digital belongings and outline clear roles for the Security Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in regulating digital securities and commodities.
The landmark crypto invoice has a 59% probability of passing earlier than the tip of 2026, in response to present prediction market projections. The odds have been round 70% on Jan. 13, however promptly started dropping as key crypto help waned and doubt crept in. Unlike the earlier model, the brand new draft comes solely from Republicans solely, however that ought to not dampen the invoice’s potential for bipartisan help, in response to Patrick Witt, the Executive Director of the President’s Council of Advisors for Digital Assets.
The newly launched Senate Ag market construction invoice is a top quality bipartisan product that deserves the help of your complete committee at Tuesday’s markup.
The textual content is +80% much like House CLARITY—a invoice that obtained the help of 17/24 Democrats within the Ag committee and almost 40%…
— Patrick Witt (@patrickjwitt) January 22, 2026
Senate Agriculture Committee Chairman John Boozman (R-AR) mentioned in the release announcement:
“I recognize Senator Booker and his employees for working with us and offering considerate additions as we advance shopper protections and supply new authority to the CFTC. While variations stay on basic coverage points, this invoice builds on our bipartisan dialogue draft whereas incorporating enter from stakeholders and represents months of work. Although it’s unlucky that we couldn’t attain an settlement, I’m grateful for the collaboration that has made this laws higher. It’s time we transfer this invoice, and I look ahead to the markup subsequent week.”
So, what’s going to the invoice truly imply for the longer term of crypto, DeFi and occasion buying and selling? That half continues to be to be decided, and at present lies within the fingers of Senate members and key stakeholders throughout crypto and finance. And whereas a brand new markup assembly is scheduled for Jan. 27, many hurdles stay as urgency ramps up amongst DeFi lovers.
How Republican-only model impacts crypto invoice’s odds
The invoice was initially developed by bipartisan negotiations between Boozman and Senator Cory Booker (D-NJ). The bipartisan draft version mirrored months of negotiations, incorporating agreed-upon insurance policies and unresolved points marked in brackets. The markup session for the earlier draft was canceled last week when key stakeholder Coinbase CEO Brian Armstrong mentioned his firm “can’t help the invoice as written.”
The invoice went again to the drawing room, and Senate committee republicans emerged with a brand new partisan draft. Boozman mentioned in Wednesday’s information launch that the 2 sides couldn’t bridge “basic coverage points.”
The Senate requires 60 votes to beat a filibuster and advance laws to a flooring vote. With Republicans holding a slim majority, a Republican-only invoice may face a more durable path to turning into regulation. However, the chances for a invoice passing by the tip of the yr stay simply higher than a coinflip, with some fluctuation — to be anticipated contemplating an obvious lack of consensus on the invoice textual content. Next week’s markup and responses may deliver extra market confidence in a single route or the opposite.
Adding to the complication of getting a invoice to the end line is the truth that the crypto market construction invoice is being dealt with by two separate Senate committees, Banking (overseeing SEC jurisdiction) and Agriculture (overseeing CFTC jurisdiction). After every Committee completes its markup of their parts, the 2 drafts will must be merged right into a single invoice earlier than a unified model can transfer to the Senate flooring for a vote.
The Senate Banking Committee has its personal draft bill language to mark up, protecting points associated to securities regulation beneath the Banking Committee’s jurisdiction. The committee’s chair Tim Scott mentioned on X following the pause on the final markup, “Everyone stays on the desk working in good religion.”
Stablecoin yield sticking level
A significant sticking level to this point between the central banks and crypto sector has been the remedy of stablecoin yield within the invoice, which falls beneath the Senate Banking committee’s portion of the Clarity Act invoice language. Armstrong took situation with the earlier draft model, saying there have been “Draft amendments that may kill rewards on stablecoins, permitting banks to ban their competitors.”
Meanwhile, different crypto-centric Kraken, a16z, and Ripple continued to help shifting ahead on the invoice. White House AI & Crypto Czar David Sacks didn’t mince phrases when he told CNBC he needs a invoice to maneuver ahead.
“I’m in favor of facilitating a compromise so we are able to get a invoice on the President’s desk,” mentioned Sacks.
Traditional banks see approved stablecoin yield as an existential risk to their business. But Sacks identified that the already-passed GENIUS Act already consists of yield for stablecoins.
“I believe the banks have to acknowledge that yield is already a function of the GENIUS Act that handed and was signed into regulation in August,” mentioned Sacks. “…I perceive their level of view, however once more, if there’s no deal, then they’re going to lose on this situation.”
Urgency to cross crypto market construction invoice
With so many people and organizations with quite a bit at stake, industries and stakeholders stay divided on help. But there may be palpable urgency among the many majority of crypto stakeholders, and understandably so, contemplating the dimensions of the unregulated crypto business mixed with the present pro-crypto administration.
As Patrick Witt said on X after the final markup delay:
“Do we take benefit of the chance to cross a invoice now, with a pro-crypto President, management of Congress, wonderful regulators on the SEC and CFTC to jot down the principles, and a wholesome business? Or will we fumble the ball and permit Dems to jot down punitive laws within the wake of a future monetary disaster à la Dodd-Frank?
“You may not love each half of the CLARITY Act, however I can assure you’ll hate a future Dem model much more. Let’s preserve working to enhance the product, recognizing that compromises will must be made with the intention to get 60 votes within the Senate, however let’s not let good be the enemy of the great.”
Compromise will clearly be key for getting a invoice by, however highly effective forces may actually forestall it from passing this yr. Will the banks — or when will the banks — get behind a model of the Clarity Act, is perhaps the true query. For now, let’s check out what’s within the revised model of the Senate Agriculture Committee draft launched this week.
Key parts of the present Clarity Act invoice draft
Based on the full bill text from the Senate Agriculture Committee, there are a selection of key parts, some of that are extra contentious than others.
1. Who will get to control crypto (CFTC will get the large position)
The invoice offers the CFTC “unique jurisdiction” over digital commodity spot markets, which means Bitcoin, Ethereum, and different crypto that qualify as “digital commodities” could be regulated by the CFTC, not the SEC. This is a large shift from the present regulatory grey zone.
2. What counts as a “digital commodity”
The invoice defines a digital commodity as “any fungible digital asset that may be completely possessed and transferred, individual to individual, with out obligatory reliance on an middleman, and is recorded on a blockchain.”
What’s excluded:
- Securities (nonetheless SEC territory)
- Permitted fee stablecoins (lined individually beneath GENIUS Act)
- Bank deposits
- Commodities derivatives
- Pooled funding autos (like crypto ETFs)
- NFTs and collectibles (except mass-minted and traded speculatively)
Notably included: The invoice explicitly consists of “meme cash”—outlined as “a digital asset impressed by an web meme, character, present occasion, or development for which the promoter seeks to draw an enthusiastic on-line neighborhood to buy and have interaction in buying and selling of the digital asset primarily for speculative functions.”
3. New registration necessities for crypto companies
The invoice creates three new registration classes:
- Digital commodity exchanges – Trading platforms providing spot markets in digital commodities
- Digital commodity brokers – Entities that solicit or settle for orders from retail prospects
- Digital commodity sellers – Entities that purchase/promote instantly with retail prospects off-exchange
These entities should register with the CFTC inside 90 days of the registration course of being established.
4. DeFi will get particular remedy
The invoice carves out protections for really decentralized methods:
A “decentralized finance buying and selling protocol” is outlined as a blockchain system the place:
- Transactions execute by way of automated, predetermined algorithms
- No one maintains custody or management of person belongings
- No single particular person or group can materially alter the system’s performance
- No one can unilaterally limit or censor customers
The key safety: If a protocol meets this definition, it’s exempt from the change registration necessities.
5. Customer safety necessities
Exchanges should:
- Segregate buyer funds (can’t commingle with firm cash)
- Hold buyer crypto with a “certified digital asset custodian”
- Disclose details about listed tokens together with supply code, transaction historical past, tokenomics, buying and selling quantity, and materials dangers
- Maintain monetary sources exceeding one yr of working prices plus all buyer obligations
6. Prohibition on self-dealing (with exceptions)
Exchanges and their associates typically can’t commerce towards their very own prospects. However, exceptions exist for:
- Transactions at buyer route
- Liquidity provision (with insurance policies to restrict this to moderately anticipated demand)
- Risk-hedging actions
7. Listing requirements for tokens
To record a token, exchanges should confirm that:
- The digital commodity is “not readily vulnerable to manipulation”
- Required disclosures have been filed with the SEC (or equal public info exists)
- Information concerning the token is “right, present, and out there to the general public”
Next steps for crypto invoice laws
If the present invoice passes, it could typically take impact 18 months after enactment. An expedited registration course of have to be established inside 180 days and registered entities get a “provisional standing” interval to come back into full compliance. But earlier than that, the invoice might want to get by the next steps:
- January 27: Senate Agriculture Committee markup vote
- Parallel observe: The Senate Banking Committee nonetheless must mark up its portion (protecting SEC jurisdiction points together with stablecoin yield)
- Reconciliation: The two committee payments have to be merged
- Senate flooring vote: Requires 60 votes except Republicans use reconciliation (unlikely for this laws)
- House reconciliation: Must be harmonized with the House-passed CLARITY Act
While the Clarity Act’s passage nonetheless has a number of hurdles to cross, its probabilities will hinge on garnering sufficient help to get a palatable model to the Senate flooring, and get the mandatory votes there. You can wager that prediction market merchants are watching carefully, and buying and selling alongside as developments unfold.
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