TD Cowen Assigns 25% Chance for Crypto Clarity Act to Pass This Fall
Investment bank TD Cowen has indicated that the Crypto Clarity Act, a significant piece of legislation aimed at establishing a regulatory framework for U.S. cryptocurrency markets, has only a 25% chance of passing this fall. This assessment comes after recent delays and concerns about political maneuvering, particularly from Democratic lawmakers.
Originally expected to be voted on before the Senate's five-week recess, the bill's progress has been stalled, with a new vote now scheduled for September. TD Cowen noted that while the bill is not dead, the path forward has become more challenging, assigning a 75% probability that it will fail to become law this fall.
One potential scenario outlined by TD Cowen is that the Senate may initially pass a cloture vote in September, only to see Republicans block Democratic amendments related to ethics and anti-money laundering provisions. This could lead to Democrats abandoning a second cloture vote altogether. Cloture is a procedural tool used in the Senate to end debate on a bill.
The Clarity Act has garnered bipartisan support, having previously passed the House of Representatives last year. However, some Republicans have accused Democrats of intentionally stalling the bill. The latest draft includes provisions that would prohibit government officials from promoting or profiting from cryptocurrencies.
Despite the challenges, major financial institutions, including Goldman Sachs and Fidelity, along with law enforcement groups, have expressed support for the bill. Critics, including Senator Elizabeth Warren, have raised concerns that the legislation could disproportionately benefit the president and his family.
Updated 02:30 UTC
Latest Developments on the CLARITY Act
The US Securities and Exchange Commission (SEC) is set to hold an open meeting on Friday at 10 a.m. ET to discuss new rules aimed at establishing a tailored offering regime for specific investment contracts involving crypto assets.
This meeting comes after the Senate's failure to advance the CLARITY Act prior to its August break, casting doubt on the bill's chances of becoming law this year. A cloture vote is planned for September 15 by Senate Republicans to test the legislation, although there are ongoing disagreements regarding ethics restrictions, stablecoin rewards, and enforcement powers.
SEC Chair Paul Atkins has indicated that the SEC may pursue rulemaking as a backup plan if Congress does not advance the CLARITY Act. In a July interview, he highlighted that the SEC could tackle many of the bill's significant market structure issues, but emphasized that congressional legislation would offer clearer and more enduring guidance for digital asset regulation.
Updated 03:30 UTC
New Developments on the Clarity Act
White House crypto advisor Patrick Witt has confirmed that the administration is fully committed to passing the Clarity Act in September. This follows the bill's passage in the House in 2025.
The Clarity Act, formally known as H.R. 3633, aims to redefine regulatory oversight of digital assets, transferring some authority from the SEC to the Commodity Futures Trading Commission.
Witt's statement indicates a growing confidence in the administration's ability to secure the bill's passage after the Senate's August recess.
Market activity has shown an increase in confidence, with a recent 5-point spike in YES pricing for the Clarity Act's passage in 2026.
Key figures such as Senate Majority Leader Chuck Schumer and Senate Banking Committee Chairman Tim Scott are expected to play crucial roles in the legislative process.
Observers will be closely monitoring the Senate's actions for any procedural moves that could expedite the Clarity Act's passage.
Updated 07:30 UTC
Latest Developments on the Crypto Clarity Act
- The US Senate has postponed further discussions on the Clarity Act until mid-September due to the August recess.
- Senate Majority Leader John Thune has filed for cloture on the Clarity Act, which may facilitate progress on the bill next month.
- The Clarity Act aims to regulate digital assets under the Commodity Futures Trading Commission (CFTC), which is viewed as more favorable by industry stakeholders compared to the SEC.
- Opposition from traditional financial institutions has intensified, with concerns that the bill could threaten financial stability and diminish bank deposits in favor of stablecoins.
- Confidence in the Clarity Act's passage has significantly decreased, with Polymarket odds dropping from 82% in February to 25% currently.
- Coinbase CEO Brian Armstrong expressed disappointment over the lack of progress, emphasizing the importance of a clear federal market structure for investment and innovation in the US.
FAQ
What is the Crypto Clarity Act?
The Crypto Clarity Act is a proposed piece of legislation aimed at establishing a regulatory framework for U.S. cryptocurrency markets.
What is the current likelihood of the Crypto Clarity Act passing this fall?
TD Cowen has assigned a 25% chance for the Crypto Clarity Act to pass this fall, indicating a 75% probability that it will fail to become law.
What are the main concerns regarding the passage of the Crypto Clarity Act?
Concerns include political maneuvering, particularly from Democratic lawmakers, and the possibility of Republicans blocking amendments related to ethics and anti-money laundering provisions.
Who supports the Crypto Clarity Act?
The bill has garnered bipartisan support, with major financial institutions like Goldman Sachs and Fidelity, as well as law enforcement groups, expressing their support.
What criticisms have been raised about the Crypto Clarity Act?
Critics, including Senator Elizabeth Warren, have raised concerns that the legislation could disproportionately benefit the president and his family.
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