Main Points:
- Senator Cynthia Lummis aims for both the CLARITY Act (House) and GENIUS Act (Senate) to become law by 2026
- Senate passed the GENIUS Act on June 17, 2025, by a bipartisan 68–30 vote
- GENIUS establishes federal guardrails for U.S. dollar-pegged stablecoins, mandating reserve rules and consumer protections
- CLARITY would define digital assets under securities and commodities laws, clarifying regulatory jurisdiction
- Bipartisan consensus is threatened by concerns over President Trump’s crypto holdings and potential conflicts of interest
- Passage in the narrowly divided House requires additional Democratic support in the second half of 2025
- Timeline shifted from an expected end-2025 completion to a more cautious 2026 target
Background: The CLARITY and GENIUS Acts Explained
Senator Cynthia Lummis (R-WY), chair of the Senate’s Digital Assets Subcommittee, is championing two complementary bills aimed at establishing a comprehensive U.S. framework for digital assets. In the House, the Digital Asset Market CLARITY Act seeks to codify distinctions between securities and commodities, assigning clear oversight roles to the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Meanwhile, in the Senate, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) would treat U.S. dollar-pegged stablecoins as payment systems rather than securities, subject to reserve requirements, auditing, and robust consumer protections.
Both bills emphasize “light-touch” regulation that fosters innovation:
- GENIUS Act mandates that stablecoin issuers hold 100% liquid reserves and publish regular attestations;
- CLARITY Act fixes a statutory test distinguishing tokens subject to securities laws from those treated as commodities, protecting self-custody and decentralized protocols.
Progress in the Senate: Passage of the GENIUS Act
On June 17, 2025, the Senate delivered its “first major crypto bill,” approving the GENIUS Act by a 68–30 margin—18 Democrats joined Republicans in support amid criticism that the legislation exempts the President and his family from its restrictions on congressional profits. (See the chart below for the detailed vote breakdown.)
Bipartisan Support and Political Challenges
Lummis acknowledged hurdles in securing bipartisan buy-in. Some Democrats withheld support due to concerns that the bills might benefit President Trump’s crypto ventures—he and his family hold stakes in World Liberty Financial, which issues a stablecoin, and received substantial political donations from crypto executives. Others fear the legislation doesn’t go far enough to address systemic risks akin to historical monetary crises. Despite this, a coalition of Senate Republicans and 18 Democrats backed GENIUS, illustrating the strong push to assert U.S. leadership in digital finance before international competitors like the EU and Singapore.
Implications for the Crypto Industry
If enacted, the GENIUS Act will:
- Integrate stablecoins into mainstream payment infrastructure, potentially boosting on-chain transaction volumes;
- Lower costs of compliance for innovative fintechs by offering a clear federal safe harbor;
- Encourage treasury demand, as stablecoin reserves are likely to be held in short-term U.S. government securities, potentially reducing government borrowing costs.
Meanwhile, the CLARITY Act promises to remove regulatory ambiguity that has driven many U.S. digital assets startups offshore, by granting the SEC and CFTC defined statutory boundaries. Together, these bills could unlock new DeFi applications and institutional adoption, from programmable commerce to tokenized asset issuance.
Looking Ahead: The Path to 2026
With the Senate’s work complete, attention shifts to the House, where Republicans hold a narrow majority and must negotiate Democratic support for both the CLARITY and stablecoin measures. White House advisor Bo Hines had optimistically forecast floor readiness by August 2025, but Lummis now cautions that failure to pass both bills by 2026 would be “very disappointing”. Stakeholders across the crypto ecosystem—exchanges, custodians, and developers—are preparing lobbying efforts and technical comment letters for the House Financial Services Committee’s markups expected this fall.
Conclusion
The simultaneous march of the CLARITY and GENIUS Acts marks a pivotal moment for U.S. crypto policy. By codifying clear rules for stablecoins and market structures, Congress has the opportunity to foster innovation, protect consumers, and ensure America remains at the forefront of digital finance. Yet, political headwinds—particularly regarding potential conflicts of interest at the highest levels—pose a real risk to timely passage. As the House takes up these measures, the industry and its advocates will watch closely: the 2026 deadline looms as both a target and a test of Congress’s willingness to legislate with clarity and confidence for the digital age.
