[DigitalToday reporter Jinju Hong (홍진주)] The U.S. Senate voted down a procedural step to begin considering the Clarity Act, which sets an oversight framework for the digital asset market. The bill failed to secure the bipartisan support needed to advance, leaving its future timetable uncertain. Crypto markets including bitcoin weakened immediately after the vote.

On Sept. 16 (local time), blockchain outlet CoinPost reported that the Senate held a vote to end debate on the Clarity Act, but it failed 49 to 50. Advancing to full consideration required 60 votes, but the motion fell short.

The Clarity Act distinguishes oversight authority for cryptocurrencies between the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission and sets a regulatory framework for the digital asset market. It passed the House in July last year, but it failed to win cooperation from Democrats in the Senate.

Democrats took issue with ethics provisions involving U.S. President Donald Trump and crypto-related business. Democrats have argued that safeguards are insufficient for conflicts of interest and investor protection, and bipartisan agreement, a key condition for passage, did not materialise.

Republicans responded that the vote did not mean the bill was completely scrapped. Senator Ted Cruz referred to the film 'The Princess Bride' and said there is a difference between 'dead' and 'mostly dead', mentioning the possibility the bill could be pushed again. Senator John Kennedy also said the result was not unexpected but added the bill was not completely over.

Kennedy argued that Democrats also understand the need for legislation to clarify market structure. He cited the lame-duck session that runs until a new Congress is formed after the November midterm elections when discussing timing.

Republicans criticised Democrats' opposition as driven by political calculations. Cruz said Democrats' response could push crypto-related business and jobs overseas. It is still not specifically decided how to strengthen the ethics provisions Democrats are demanding or when the bill will be put to a vote again.

Market reaction was immediate. Bitcoin at one point fell to the $76,000 range, and selling spread to crypto-related stocks. CoinPost reported bitcoin fell by as much as about $5,000 on a 24-hour basis from early morning to late morning on Sept. 16.

The Clarity Act has been seen as a key bill for overhauling the U.S. crypto regulatory framework. Unlike the Genius bill, which focuses on stablecoin regulation, the Clarity Act focuses on distinguishing the jurisdictions of the SEC and CFTC and clarifying regulatory standards for digital assets.

After the procedural defeat, the bill's next steps depend on how much it can reflect the ethics and consumer protection provisions Democrats are demanding and whether bipartisan agreement can be brought back together during the lame-duck session after the November midterm elections.