What Could Happen if the CLARITY Act Fails to Pass in 2026

With lawmakers in the US Senate set to consider legislation pushed by many in the cryptocurrency industry for regulatory clarity, there’s a limited window for the bill to become law, potentially delaying it into the next session of Congress with different politics in play.

The US Senate is scheduled to return to session on Monday after more than a month in which lawmakers were on state work periods. Senator John Thune, the Republican majority leader in the chamber, has scheduled a cloture vote on the Digital Asset Market Clarity (CLARITY) Act for Tuesday, in which his compatriots will need support from a handful of Democrats to meet the 60-vote threshold and overcome a filibuster.

Should the bill fail to advance with a three-fifths supermajority, the Senate will have less than 36 days of business before 2027, when a new session of Congress is scheduled to be sworn in, one where Democrats could be in control, depending on the outcome of November’s midterm elections.

Senator Cynthia Lummis, one of CLARITY’s biggest supporters, warned on Sept. 6 that the “next real opportunity” for the bill to pass might not be until 2030 if lawmakers were unable to reach an agreement and send it to the president’s desk. She is also not running for reelection in 2026.

All 435 seats in the House of Representatives and 33 in the Senate are up for grabs in the midterm elections . Event contracts on prediction market platforms currently give Democrats the odds on retaking a majority in the House, while the party’s chances in the Senate are basically a coin flip.

Related: Rushed CLARITY Act vote could set legislation back, Gallego warns

When Republicans took the Senate from Democrats following the 2024 elections, this left the party with a legislative trifecta — control of the Senate, House and the presidency — giving it exceptional influence over passing laws favorable to the crypto industry, including the Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act. A reversal of this party control could likewise leave Republicans approaching bills on Democrats’ terms beginning next year.

Crypto money potentially swaying voters in 2026

Senator Sherrod Brown, an Ohio Democratic lawmaker who previously chaired the Senate Banking committee, was voted out in 2024 in a race that saw cryptocurrency-backed political action committee (PAC) Fairshake and many others pouring millions of dollars into ads supporting his opponent, Republican Bernie Moreno.

Now, Brown is back, running in a special election against Republican Jon Husted to complete the term won in 2022 by now-Vice President JD Vance.

A PAC like Fairshake, backed by crypto exchange Coinbase and Ripple Labs, is just one way the industry is pushing to get what it calls more “pro-crypto” lawmakers in Congress. Although many candidates, both Democrat and Republican, supported by Fairshake-backed ads, have gone on to win their 2026 primaries, the PAC hasn’t always been successful. 

In March, Illinois Lieutenant Governor Juliana Stratton won the Democratic primary for one of the state’s US Senate seats despite being the target of industry-funded attack ads. Many incumbents who have voted in favor of bills like GENIUS or CLARITY while in office have found support from crypto PACs, while challengers or those critical of digital assets are sometimes named in negative ads.

“Rep. Auchincloss voted for the CLARITY ACT, which explains why the crypto industry is heavily supportive of his reelection,” said Jason Poulos, a Democratic candidate who ran against Massachusetts Representative Jake Auchincloss in the primary for the state’s 4th congressional district. A Fairshake-affiliated PAC spent about $189,000 on ads supporting Auchincloss. Poulos added:

“The influx of outside crypto industry cash means that these oligarchs have an outsized influence on our representation and federal policies. It is why we need to get big money out of politics […]”

Presidency, regulators unlikely to change before 2029

Whether Democrats retake both chambers of Congress in November, neither, or just one, the result will not change Republican control of the White House until January 2029 and maintaining the power to veto legislation. For example, if the president chooses to veto a Democrat-backed crypto bill, both the House and the Senate would need a two-thirds supermajority vote to override his actions.

In addition, the heads of two of the major financial agencies, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC), are unlikely to change while Trump remains in office. The president nominated Paul Atkins to chair the SEC and Michael Selig the CFTC, both of whom have signaled plans to proceed with digital asset regulation if Congress fails to advance CLARITY this year.

Magazine: Is Bitcoin too volatile to risk your retirement on?