Key Takeaways:
Fidelity called on the US Senate to pass the CLARITY Act on Friday, joining a coalition of financial firms and crypto advocacy groups pushing for digital asset market structure legislation before the August recess.
"The Clarity Act is essential for America's future," Galaxy Digital Chief Executive Mike Novogratz said on X on Saturday, adding that negotiations were down to "word-smithing" around an ethics clause. "We are calling on both sides to read the room."
The world's third-largest asset manager, which reported $7.1 trillion in managed assets in its 2025 annual report, joins the Crypto Council for Innovation, the Digital Chamber and the Blockchain Association in urging Senate leaders to bring the bill to the floor. Coinbase Chief Executive Brian Armstrong also called for a full Senate floor vote on Wednesday, saying the legislation "fixes that with strong consumer protections, real tools for law enforcement, and a path for America to lead in this industry."
The CLARITY Act would establish a federal regulatory framework for digital assets, assigning the Commodity Futures Trading Commission oversight of digital commodities such as Bitcoin while keeping the Securities and Exchange Commission's jurisdiction over tokens that function as securities. The House passed its version 294-134 in a bipartisan vote on July 17, 2025, and the Senate Banking Committee advanced the legislation 15-9 in May. But the bill needs 60 votes on the Senate floor, where Republicans hold a 52-47 majority — meaning at least seven Democrats must cross over.
The White House agreed to an ethics package this week that would bar the president, vice president, lawmakers and senior officials from issuing or sponsoring digital assets until 2029, resolving a months-long impasse. Treasury Secretary Scott Bessent said lawmakers are at the "1-yard line," according to a Bloomberg report Tuesday. Still, some Democrats argue the restrictions contain loopholes and rely too heavily on enforcement by the Justice Department while preventing state attorneys general from bringing their own cases.
The Senate is scheduled to begin a five-week recess on Aug. 10, leaving 21 calendar days for lawmakers to reach a final agreement. If the bill misses that window, consideration could slip into the weeks before the 2026 US midterms, potentially pushing the process into 2027 if the legislation expires and must be reintroduced in the new Congress. Polymarket traders price the bill's chances of passage this year at roughly 37%, a partial recovery from a record low of 32% reached last week but well below the 75% probability earlier in the year. Kalshi offered event contracts with a 40.3% chance that the bill would pass before the August recess as of Friday.
Senators from both parties have increased pressure for a resolution. "I want this done," Sen. Mark Warner, a Virginia Democrat involved in the negotiations, said. "I'm tired of being in crypto hell. I want America to lead in digital assets." Sen. Cynthia Lummis, a Wyoming Republican and one of the legislation's most prominent supporters, added: "If something is genuinely decentralized, it should not be regulated like a bank. Getting that distinction right took years of work, and we finally have the opportunity to make it law. Let's pass the Clarity Act."
Passage of the CLARITY Act would provide the legal certainty that institutional investors such as Fidelity have sought before increasing their digital asset exposure. Analysts at 24/7 Wall St. estimated that between $4 billion and $8 billion in additional institutional money could enter the market if the legislation provides permanent legal certainty, with XRP potentially pushing toward the $5 range under a favorable regulatory outcome. The $63 billion market rebound following the White House's ethics agreement lifted total crypto market value 2.8% to $2.32 trillion, with Bitcoin trading near $66,604.
This article is for informational purposes only and does not constitute investment advice.
