The major US digital assets bill has hit a roadblock after the Senate failed to advance the CLARITY Act on September 15.

The Senate voted 49-50 on a procedural motion to move the bill forward. It needed 60 votes to pass that step. Because it fell 11 votes short, the Senate did not even begin debating the bill.

The vote was not a final vote on whether to pass the CLARITY Act. It was a vote on whether senators could begin debating it. Still, the result is a serious setback for the digital asset industry, which has spent years pushing for clearer rules in the United States.

The bill, formally known as the Digital Asset Market Clarity Act, is more than 600 pages long. It would create clearer rules for the digital asset market and divide responsibility between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).

One of the main goals is to make it clearer which digital assets should be treated as securities and which should be treated as commodities.

The bill also includes rules for related companies, protections for customers and measures dealing with money laundering. It would give the CFTC a larger role in overseeing parts of the digital asset market.

The biggest problem was a lack of bipartisan support.

Republicans control 53 seats in the Senate, meaning they needed help from Democrats to reach the 60 votes required. But no Democrat voted to advance the bill.

Four Republicans also voted against it: Susan Collins, Josh Hawley, Jerry Moran and Thom Tillis. Senator Chris Coons, a Democrat, did not vote.

The vote came after months of negotiations between Republicans and Democrats. Republican negotiators said they had accepted 126 changes requested by Democrats.

Some of those changes involved ethics rules for government officials who have connections to digital asset businesses. Other disagreements involved stablecoin rewards and protections for developers who create non-custodial Bitcoin and digital asset software.

Democrats argued that the ethics provisions did not go far enough, particularly regarding President Donald Trump and his family's connections to certain businesses. Senator Ruben Gallego, a key Democratic negotiator, criticized Republicans before the vote.

“The compromise we had was a good ethics compromise that would have bought a lot of Dem votes,” Gallego said. But the two sides were unable to reach a final agreement.

For bitcoin holders, the immediate effect is limited. The CLARITY Act was not going to directly determine the price of bitcoin, and the Senate vote did not change the existing rules governing Bitcoin.

The bigger issue is regulatory certainty.

Supporters of the bill argue that clear laws would make it easier for digital asset companies, banks and investment firms to operate in the United States.

The CLARITY Act’s failure to pass sparked widespread online discussion about why the bill fell short and what its failure could mean.

Felix Shipkevich, a law professor at Hofstra University, said the bill could help settle a long-running question over which federal agency should regulate different digital assets.

“If adopted in its current form, it will spell out when a digital asset will be treated as a commodity and when a security,” he said.

Braden Perry, a former CFTC trial attorney, made a similar point. “The hardest fights were never about the fraud. They were about jurisdiction,” he said.

The bill could also have required digital asset platforms to register and keep customer assets separate from company funds. Perry said this could help address problems exposed by the collapse of FTX.

However, he warned that regulation would not eliminate the risks. “It will not make your bitcoin go up, and it will not make crypto safe. Volatility stays. Scams stay,” Perry said.

The failure of the bill does not mean efforts for regulation have stopped.

The SEC and CFTC can continue developing rules under their existing powers. The industry is now expected to pay even more attention to what the two agencies do.

The CLARITY Act is technically still on the Senate calendar, so lawmakers could try again. But time is running short because Congress is preparing for its election recess ahead of the November midterms.

The bill would also face another hurdle if it eventually passes the Senate. The Senate version differs from the version previously approved by the House, meaning both chambers would need to agree on the same legislation.

For now, the Bitcoin and digital asset industry is left without the comprehensive federal market-structure law it had been seeking. The SEC and CFTC will continue to shape the rules, while lawmakers may return to the issue in the next Congress.