McHenry points to a missed deal
Former House Financial Services Committee Chairman Patrick McHenry says the crypto industry had a strong shot at regulatory clarity in 2026 and let it slip. In a Nov. 6 interview with Eleanor Terrett, he criticized industry participants for rejecting workable compromises while holding out for better terms. He also said he shares some responsibility. That matters because the CLARITY Act failed for many reasons, not just one.
The CLARITY Act stalled in the Senate
The Digital Asset Market Clarity Act passed the House on July 17, 2025, by 294 to 134. It aimed to sort out SEC and CFTC roles and set registration and compliance rules for digital asset firms. In the Senate, a Sept. 15, 2026 motion to proceed failed 49 to 50, short of the 60 votes needed to move forward. That was a procedural vote, but it effectively stopped the bill.
Stablecoin rewards and ethics fights added friction
One sticking point was whether crypto platforms could pay rewards on stablecoin balances. Coinbase CEO Brian Armstrong pushed to keep those rewards, while banks argued they could pull deposits out of the banking system. Coinbase withdrew support for an earlier version in January 2026, which helped cancel a planned Senate Banking Committee markup. A May compromise later won Armstrong’s support, but the fight ate time. Democrats also sought ethics limits on public officials with crypto ties, including ventures linked to President Trump. Republicans added some ethics language, but it was not enough.
The midterms changed the math
After Democrats won both chambers in November 2026, the odds for the CLARITY Act in its current form fell. Future talks may focus more on oversight and consumer protections, perhaps with terms less friendly to crypto. The $GENIUS Act, enacted in July 2025, shows narrower stablecoin legislation can become law. That contrast hangs over the market structure debate.
For crypto businesses, the practical result is more waiting and more legal review. Token issuers still need to assess securities law questions. Exchanges, wallet providers, and payment platforms still face federal and state licensing rules. Agency guidance can shift with a new administration. McHenry’s point is blunt: the industry may have traded a possible deal for a perfect one that never arrived. Maybe he is right. Maybe the politics were simply too hard. Either way, the chance is gone for now.
