If the CLARITY Act fails to pass, there is a possibility it could be completely rewritten after the Democrats take power in 2027.

Written by: Turner Wright

Translated by: Chopper, Foresight News

The U.S. Senate, after more than a month of in-state work recess, will reconvene on Monday to consider a bill that the cryptocurrency industry has eagerly anticipated, aimed at clarifying regulatory rules. However, the time window for this bill to officially become law is extremely tight, and it may be delayed until the next Congress, at which point the political landscape will be completely different.

Senate Majority Leader John Thune has scheduled a vote on Tuesday to end debate on the CLARITY Act. At that time, the Republicans will need to gain the support of a few Democratic senators to reach the 60 vote threshold to break the filibuster.

If the bill fails to obtain a supermajority to advance, it is unlikely to come to fruition before the new Congress is sworn in in 2027. The results of the November midterm elections will determine whether the Democrats will control Congress at that time. One of the bill's strongest advocates, Senator Cynthia Lummis, stated on September 6 that if lawmakers cannot reach a consensus and send the bill to the president for signature, the next real opportunity for passage might not come until 2030. Lummis herself will not run in the 2026 Senate reelection.

This midterm election will change all 435 seats in the House of Representatives and 33 Senate seats. Prediction market Kalshi's event contracts show that the likelihood of the Democrats regaining a majority in the House is favored by the market; while the battle for control of the Senate is nearly a toss-up, making the outcome difficult to predict.

After the 2024 election, if the Republicans secure control of the Senate, the House, and the presidency, achieving a trifecta, they will push for legislation friendly to the cryptocurrency industry, one of which is the GENIUS Act. Once the party dynamics in Congress flip, starting next year, the Republicans can only advance relevant bills under the conditions set by the Democrats.

2026 Election: The Money Game of the Crypto Political Action Committee

Former Ohio Democratic Senator Sherrod Brown, who previously chaired the Senate Banking Committee, faced millions of dollars in advertising support from cryptocurrency political action committees (PACs) like Fairshake that backed his opponent, leading to his defeat in the 2024 election. Now, Brown is running again, vying for the Senate seat left vacant by Vice President Vance.

Fairshake, funded by cryptocurrency companies such as Coinbase and Ripple, is an important tool for the industry to support "pro-crypto" lawmakers entering Congress. Despite many candidates receiving significant advertising support from this PAC winning their 2026 primary elections, this PAC is not invincible.

In March of this year, Illinois Lieutenant Governor Juliana Stratton won the Democratic primary for U.S. Senator in her state despite facing a barrage of attack ads from the industry. For sitting lawmakers who vote in support of the GENIUS Act and CLARITY Act, the crypto PAC will provide funding; whereas challengers who are critical of crypto will become targets for negative advertisements.

In Massachusetts' 4th Congressional District, Democratic candidate Jason M. Palos faced incumbent Congressman Jake Auchincloss in the primary, stating: "Auchincloss voted in favor of the CLARITY Act, which is why the crypto industry is spending heavily to fund his reelection." A PAC related to Fairshake ran campaign ads for Auchincloss. Palos added: "The influx of outside money from the crypto industry means that a small group of oligarchs has excessive influence over our lawmakers and federal policies. This is precisely why we need to drive big capital out of politics."

Before 2029: It Will Be Difficult to Change the Landscape of the Presidency and Regulators

Regardless of whether the Democrats can win one or both houses of Congress in the November midterms, the White House will continue to be controlled by the Republicans until January 2029, and the president retains veto power over legislation. For instance, if the president vetoes a Democrat-led crypto bill, both houses must achieve a two-thirds majority to override the president's veto.

Additionally, as long as Trump remains in office, the heads of the two major U.S. financial regulatory agencies, the SEC and CFTC, will not change. Trump appointed Paul Atkins as SEC Chairman and Michael Celly as CFTC Chairman. Both regulatory heads have publicly stated that if Congress cannot advance the CLARITY Act this year, the regulators will independently implement regulations for digital assets.