CLARITY Act Passage Odds Drop to 10% as Senate Time Runs Out

Key Insights

• CLARITY Act passage odds fell to 10% at Galaxy Digital.
• Senate lawmakers return Sept. 14 with limited floor time.
• Stablecoin rewards and ethics provisions remained major sticking points.

Galaxy Digital cut its estimated probability of the CLARITY Act passing in 2026 to 10% on Friday. The research firm cited unresolved Senate disputes and a compressed legislative calendar after the August recess. The downgrade left U.S. crypto regulation facing another narrow congressional window.

The estimate matters because the bill would set federal rules for digital asset markets. It would divide oversight between the Securities and Exchange Commission and Commodity Futures Trading Commission. The bill also addresses stablecoin rewards, anti-money laundering controls, decentralized finance, and political ethics.

Galaxy head of firmwide research Alex Thorn said the firm lowered its passage estimate to 10%. Thorn said lawmakers had only a limited working period after returning to Washington. He argued the bill would require immediate procedural action and sustained floor attention.

The U.S. Senate Daily Press schedule showed lawmakers returning for business on Sept. 14. Reuters reported the chamber had only 14 scheduled session days before its October election recess. Senate Majority Leader John Thune filed cloture before the August break, setting a Sept. 15 procedural vote.

Galaxy had already reduced its estimate several times before Friday’s downgrade. Thorn’s latest assessment reflected unresolved negotiations rather than a formal congressional vote. The bill therefore remained alive, but its available path had narrowed sharply.

The Senate Banking Committee advanced the legislation by a 15-9 vote on May 14. The committee said the bill then moved toward Senate floor consideration. Committee text described a federal system covering digital commodities, securities rules, illicit finance, and decentralized finance.

Senate Banking Committee Chairman Tim Scott said the May vote followed months of negotiations with regulators and lawmakers. Committee records showed all Republicans and two Democrats supported advancement. Reuters identified the Democratic supporters as Ruben Gallego and Angela Alsobrooks. Both remained part of a broader negotiation over safeguards before floor passage.

Passing the Senate still requires lawmakers to clear procedural barriers. Reuters reported the Sept. 15 cloture vote would require 60 senators to limit debate. A successful vote could still leave amendment debate and other floor procedures before final passage.

Policy disputes also remained unresolved. Reuters reported Democrats sought tougher ethics enforcement and stronger anti-money laundering provisions. Some Republicans also sought stronger protections for community bank deposits before backing the bill.

The ethics debate focused partly on federal officials operating crypto businesses. Reuters reported current language would restrict such activity, while Democrats sought stronger enforcement powers. Those negotiations could determine whether supporters assemble the votes required for cloture.

Stablecoin rewards remained another source of resistance. The American Bankers Association and other banking groups urged senators to tighten restrictions on yield-like incentives. Their May 8 letter argued such incentives could draw deposits away from banks and reduce lending capacity.

Crypto firms have pushed in the opposite direction. Reuters reported industry representatives viewed broad stablecoin reward restrictions as anti-competitive. That divide left lawmakers balancing banking-sector concerns against crypto companies seeking wider product flexibility.

The banking dispute carried direct implications for the bill’s vote count. Reuters reported some Republican senators would withhold support without stronger community-bank protections. Independent Community Bankers of America chief executive Rebeca Romero Rainey said lenders would keep pressing lawmakers over deposit flight risks.

The committee draft also proposed broader crypto regulation beyond stablecoins. It included Bank Secrecy Act treatment for digital asset intermediaries and regulatory provisions covering decentralized finance. The text also preserved Securities and Exchange Commission exemptive authority under existing securities laws.

Securities and Exchange Commission Chair Paul Atkins had already outlined a separate regulatory route. In March, Atkins said proposed exemptions could draw heavily from congressional work on the bill. He described those measures as an early step toward implementing a broader market-structure framework.

Industry pressure continued before the recess. Stand With Crypto said more than 200 organizations urged Senate leaders to move the legislation. The coalition called for floor consideration as lawmakers faced a shrinking election-year calendar.

The next measurable test comes on Sept. 15, when the Senate is scheduled to consider cloture. Reuters said failure to reach 60 votes could effectively halt the legislation this year. Passage would still require further Senate action and resolution of competing policy demands.

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