Key Takeaways:
The CLARITY Act's fate hinges on whether Senate leaders preserve a provision shielding non-custodial crypto developers from money transmitter classification, with Galaxy Digital now putting passage odds at 50%.
Senator Ron Wyden urged Senate Majority Leader John Thune and Minority Leader Charles Schumer to keep the Blockchain Regulatory Certainty Act (BRCA) intact when the Digital Asset Market Clarity Act reaches the floor, according to a letter shared by Crypto in America podcast co-founder Eleanor Terrett on Wednesday.
"Developers who make and release software that allows people to manage their own digital assets — and, critically, where the developer does not control user assets — should not be treated as money transmitters solely because they create or publish software," Wyden wrote.
The BRCA has drawn opposition from law enforcement organizations and a coalition of Catholic groups, who argued last month that the provision could create gaps in oversight of illicit activity. Crypto industry groups have pushed back, saying non-custodial developers cannot control user funds and should not be classified as financial intermediaries.
Wyden argued that treating developers as money transmitters "punishes technological innovation and advancement in strategically important areas at a time when the United States must remain globally competitive." He said the BRCA reflects existing guidance from the Financial Crimes Enforcement Network and would provide legal certainty for open-source and non-custodial projects building in the decentralized finance ecosystem.
The CLARITY Act passed the House in July 2025 by a 294-134 margin, with more than 70 Democrats crossing the aisle. The Senate Banking Committee advanced the bill 15-9 on May 14, with Republican Chairman Tim Scott joined by Democrats Ruben Gallego and Angela Alsobrooks. The bill now sits on the Senate legislative calendar at No. 423, with no cloture motion filed and no floor vote scheduled.
The clock tightens as August recess looms
The Senate returns from recess on July 13, leaving roughly three weeks before the chamber disperses for the monthlong August break — the window analysts have identified as the last realistic opportunity for crypto regulation to pass in 2026. Republicans hold 53 seats, with Senators Josh Hawley and Rand Paul expected to vote no, meaning the bill needs at least seven Democratic votes to clear the 60-vote filibuster threshold under Senate Rule XXII.
Galaxy Digital recently cut its odds of the CLARITY Act becoming law this year to 50%, with the firm's analysts saying the Senate is running out of time to move on the bill before August. Stifel's chief Washington policy strategist Brian Gardner wrote that the bill "probably needs to get through the Senate by the end of July" and that missing the August recess would cause its prospects to "deteriorate materially."
Other provisions remain contested. Some lawmakers have called for tighter ethics rules on government officials' crypto involvement after President Donald Trump disclosed he made $1.4 billion from his crypto interests last year. Gaming groups have also urged Congress to ban prediction markets on sports betting within the bill.
Lawmakers backing the legislation want to pass it before this Congress ends to avoid reintroducing it in a new Congress next year. Wyden's letter frames the BRCA as essential to keeping US developers competitive globally. "Smart policy will empower law enforcement to do its job and facilitate innovation at the same time," he wrote.
This article is for informational purposes only and does not constitute investment advice.
