Bipartisan negotiations on the long-stalled Crypto Clarity Act are intensifying this week, with lawmakers racing to strike a deal before Congress leaves for its August recess. The bill, which aims to establish a federal framework for digital asset regulation, had been stuck for months over disagreements on how to split oversight between the SEC and the CFTC. Now, with the recess deadline looming, both sides are signaling a new willingness to compromise.
Why the bill stalled
The Crypto Clarity Act was introduced last year with broad support from the crypto industry, which has been pushing for clear rules of the road. But it hit a wall over jurisdictional lines — specifically, which agency gets the final say on whether a token is a security or a commodity. The SEC wanted broad authority; the CFTC argued for a lighter touch. For months, neither side budged.
That logjam appears to be breaking. Multiple sources familiar with the talks say the latest draft includes a compromise that gives the CFTC primary oversight of spot markets for digital commodities while the SEC retains authority over tokens that function like securities. The exact definition of a “digital commodity” is still being hammered out.
What’s on the table
Beyond the SEC-CFTC split, the bill also addresses stablecoin regulation, exchange registration, and consumer protections. Negotiators are said to be close on a stablecoin provision that would require issuers to hold reserves in cash or short-term Treasuries — a key demand from both parties. The exchange registration piece would create a new federal license for crypto trading platforms, replacing the current patchwork of state-by-state money transmitter licenses.
Industry groups have been lobbying hard for the bill, arguing that the U.S. is falling behind Europe and Asia in crypto regulation. The European Union’s Markets in Crypto-Assets (MiCA) framework went into effect earlier this year, and several Asian jurisdictions have already passed comprehensive laws.
The August recess deadline
Congress is scheduled to break for its summer recess at the end of next week. That gives lawmakers just a handful of legislative days to finalize the text and bring it to a vote. While a full floor vote before recess is considered a long shot, committee leaders could mark up the bill and set it up for a vote in September.
“The timing isn’t great,” one Hill staffer said on condition of anonymity. “But the fact that they’re still talking is a good sign.” The staffer noted that the bill has bipartisan co-sponsors in both chambers, which gives it a better chance than most crypto bills.
Next steps before recess
House Financial Services Committee Chair Patrick McHenry (R-NC) and Ranking Member Maxine Waters (D-CA) are expected to release a discussion draft of the compromise language as early as Thursday. If the draft gets positive feedback from key members, a committee markup could be scheduled for next week. That would be the first major legislative action on the bill in over six months.
If no deal emerges by the recess, the bill’s sponsors will have to restart negotiations in September — with the midterm elections looming in November. That political calendar could make compromise even harder. For now, all eyes are on the next few days.
