Trump urges Senate to pass CLARITY Act, saying China must not be allowed to win

US President Donald Trump urged the Senate to swiftly pass the CLARITY Act, a digital asset market structure bill, as markets weigh growing uncertainty over the legislation's prospects following the death of Sen. Lindsey Graham, which has narrowed the Republican majority in the chamber.

On Monday, Trump took to Truth Social to call on the Senate to pass the CLARITY Act in Graham's honor.

"Many countries, including China, are trying to completely dominate this critical financial sector as well as AI," he wrote. "We cannot let China win in any sector."

The CLARITY Act is a market structure bill that delineates regulatory jurisdiction and applicable law based on the nature of a digital asset, and clarifies the division of authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission. Its core provisions establish criteria for determining whether a digital asset qualifies as a security or a digital commodity, and create a registration and oversight framework for exchanges and brokers.

In a report on US digital asset legislation published last June, the Financial Supervisory Service's New York office described the CLARITY Act as "a pivotal bill that will determine not only who holds the upper hand in digital finance between banks and the digital asset industry, but whether the United States can maintain its dominance in digital finance."

In May, the Senate Banking Committee held a markup session on the CLARITY Act and advanced the bill by a vote of 15 to 9. The Senate Agriculture Committee also completed its markup in January of the Digital Commodities Industry Act, a separate bill covering CFTC jurisdiction provisions.

For the legislation to be enacted, the Senate Banking and Agriculture committees must first reconcile their respective drafts before the bill proceeds to a full Senate floor vote. Final text alignment with the House-passed version and a presidential signature would follow.

Significant hurdles remain before final enactment, however. Whether to allow interest, or rewards, on stablecoin holdings has emerged as a key sticking point, as has an ethics provision that would restrict public officials from participating in digital asset businesses — making it difficult for the two parties to bridge their differences.

The conflict-of-interest controversy has deepened particularly after Trump disclosed that he earned at least $1.4 billion from digital asset ventures last year — a figure that exceeds Coinbase Global's net profit of $1.26 billion for the same period. That disclosure underpins the Democratic Party's push for an ethics provision barring conflicts of interest between public officials and the digital asset industry.

Among the income sources, revenue tied to World Liberty Financial — a platform Trump co-founded with his sons — totaled about $594 million. Also included were approximately $636 million from Trump's meme coin business and about $197 million from the sale of a stake in Stablecoin Holdco.

Graham's death on Saturday (local time) has added another variable to the equation. He was not, however, considered a central figure in digital asset policy discussions. Graham, who represented South Carolina, was not a member of the Senate Banking or Agriculture committees in the current Congress, did not participate in votes to advance the CLARITY Act, and had made no clearly documented public statements in support of the bill, according to Cointelegraph.

Markets are nonetheless watching how Graham's death reshapes the Senate vote calculus. CNBC reported that his passing has reduced the already slim Republican majority to 52 to 47, potentially making it harder to pass the bill.

Prediction markets are reflecting the same sentiment. According to Polymarket on Tuesday, the probability of the CLARITY Act passing Congress and receiving a presidential signature by Dec. 31 stood at 38 percent — down 17 percentage points from 55 percent just 10 days ago.