It was a big moment for U.S. crypto when the House of Representatives cleared the Digital Asset Market Clarity Act that would set the regulatory stage for the industry. But before the dust settled on that eye-popping 308-122 vote, the Senate was working on a separate but similar bill that will almost certainly steal the show.
In much the same way that President Donald Trump leaned on House lawmakers to approve the Senate’s stablecoin bill as written, without putting their own stamp on it, any market structure legislation that clears the more difficult hurdle of the Senate’s 60-vote demand is likely to be a carefully balanced compromise that the administration will want approved as-is by the House.
Throughout crypto’s U.S. policy journey, the House has taken an early lead on crafting legislation, and the Senate has been the more difficult battlefield. That hasn’t stopped prominent House Republicans such as Majority Whip Tom Emmer and House FInancial Services Committee Chairman French Hill from urging the Senate to just take up their Clarity Act and pass it without revision.
“The Senate must finish the job on America’s pro-crypto future and pass the CLARITY Act,” Emmer, a Minnesota Republican, wrote in a social-media post on X last week. Were the Senate to approve the House bill without changes, it would move straight to Trump’s desk.
But pro-crypto lawmakers in the Senate have their own ideas and are trying to hatch a strategy that satisfies enough Democrats there that the final bill — whatever it’s called — gets a massive jolt of Democratic support in its final Senate vote before heading to the House for a potential sign-off.
So, here are the steps it’s got to take before U.S. crypto firms are officially and completely regulated in the U.S.:
- Senators from both parties finish writing and amending the bill, which is a process that may drag into next month for the Senate Agriculture Committee — one of the two committees that need to sign off.
- The Senate Banking Committee and Agriculture Committee both vote to forward the legislation for a floor vote.
- An amended version gets consideration by the entire Senate, where a 60-vote majority is generally required to move legislation.
- If approved, the bill gets a vote in the House, which had already overwhelmingly embraced the similar Clarity Act.
- If it gets a yes in the House, the bill is signed into law by President Trump — an outcome that Senator Cynthia Lummis suggested probably won’t happen before the end of the year.
- Then the implementation begins among the many federal agencies that need to write the actual regulations the industry must follow. This process has been known to take years before rules are finalized.
The Senate bill, like the Clarity Act before it, would establish clear borderlines between the labels for digital assets and what agencies should be regulating them. While the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS) Act is already the law to regulate stablecoin issuers, the next bill will tackle much of the rest of the industry, and it’s likely to elevate the Commodity Futures Trading Commission to a leading role in the crypto world.
In the Senate’s legislative work so far, the public has only seen a lengthy, 182-page discussion draft released by Republicans. It hasn’t yet been formally introduced, though members of the Senate Banking Committee have said they’d like to get it to the amendment stage in a couple of weeks and set it for a committee vote. (That process may not be as smooth as they’d hope, though, since Republican Senator John Kennedy of Louisiana has already made it clear he thinks it isn’t yet ready.)
Adding to the usual difficulties of Senate bandwidth, the two parties are currently in what could ratchet into a tense standoff over the U.S. spending plan, in which a government shutdown is again looming if they can’t find common ground. The nature of the Senate can mean it functions as a one-thing-at-a-time chamber.
“I don’t want to put an artificial deadline on anything, because we’re in the middle of negotiations about whether we’re going to have a bipartisan budget,” said Senator Kirsten Gillibrand, the New York Democrat that’s been working toward bipartisan crypto legislation for years. “So the most important issue that Congress has to deal with right now is the fiscal cliff.”
That negotiation “is going to consume a lot of people’s time,” she said at a CoinDesk event in Washington last week.
Once a crypto bill clears the Senate, Trump’s newest crypto adviser, Patrick Witt, told CoinDesk in an interview that the White House would expect it will have been written in close contact with House lawmakers and should be approved by that chamber as-written.
But even if the long-awaited market structure legislation becomes law at the end of 2025, it then starts what may be an even longer process to be interpreted and translated into the new regulations that will govern the sector through a number of federal agencies. Regulators such as the Securities and Exchange Commission, CFTC and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) have to dig through their requirements and figure out how to meet them — a process that involves making proposals and putting them out for public comment.
The typical rulemaking process can take a year or two, even when it’s not overly complicated or controversial. This is a whole new regulatory field, and it has a higher level of public interest than some arcane revision of securities regulations. The comments will be numerous.
The last time the U.S. financial regulators took on a massive project that involved multiple new arenas of regulation was as a result of the Dodd-Frank Act of 2010, and there’s still one core aspect of that law that hasn’t been implemented by the regulators.
At the soonest, the U.S. regulatory apparatus would grind deep into 2026 before producing the regulations, and new financial standards have historically come with an implementation window of a year or two before they must be followed.
The Clarity Act was effectively just a starting gun.
Read More: Father of Crypto Bills, French Hill, Says Market Structure Effort Should Tweak GENIUS