Galaxy Lowers CLARITY Act Passage Odds to 10% Amid Senate Hurdles

Galaxy Research, the research arm of digital-asset firm Galaxy Digital, has significantly lowered its estimate for the CLARITY Act becoming law in 2026 to just 10%. This revision reflects growing skepticism about the future of a crucial regulatory effort for the cryptocurrency industry.

Galaxy's updated assessment is based on several factors hindering the bill's progress. Key reasons include unresolved political disputes over ethics provisions, disagreements concerning stablecoin yield, and ongoing concerns about developer protection. Additionally, a compressed legislative calendar, with the U.S. Senate returning in September, has further diminished the bill's prospects.

The CLARITY Act had previously advanced through the Senate Banking Committee with a bipartisan 15-9 vote in May, and a merged text was released in July. However, the bill now faces a procedural vote scheduled for September 15, which requires 60 votes to move forward, necessitating bipartisan support from Democrats. White House adviser Patrick Witt emphasized the urgency, stating, “If they can't get there by September 15, they never will.” With the Senate having only 14 session days before its October election recess, the legislative window for the bill's passage is rapidly closing.

Formally known as the Digital Asset Market Clarity Act, the legislation aimed to establish a comprehensive federal regulatory framework for digital assets in the United States, drawing clear jurisdictional lines between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The reduced likelihood of its passage means continued regulatory uncertainty within the crypto market, potentially impacting strategic planning for financial institutions and investors in the digital asset space.

This legislative stagnation in Congress is prompting federal agencies like the SEC and CFTC to accelerate their own crypto regulatory initiatives using existing authorities. While these administrative steps are seen as an attempt to fill the regulatory vacuum created by the lack of a statutory framework, Galaxy Research cautions that such measures are inherently fragile and could be reversed by a future administration. The absence of a durable congressional framework may deter institutional investment and hinder innovation within the industry.

Other market analyses corroborate this trend; prediction markets such as Polymarket show the odds of the bill's passage falling from approximately 82% to about 16%. TD Cowen analysts assign a 25% chance, while JPMorgan analysts estimate less than a 50% probability. This collective outlook suggests that Congress faces significant challenges in establishing a lasting legal framework for digital assets by the end of 2026. The coming period will be critical to observe whether lawmakers can reach a compromise or if federal agencies' efforts to introduce more permanent regulations using existing powers will gain traction.