The Clarity Act may be closer to a Senate breakthrough than crypto markets have priced in, according to Bernstein analysts. The bill’s latest revisions address several Democratic objections, raising the possibility of a positive surprise ahead of a key procedural vote.
“We reckon any positive surprise is definitely not priced in,” analysts led by Gautam Chhugani wrote in a client note Monday.
The legislation would create federal rules for digital assets while drawing clearer lines between the Securities and Exchange Commission and the Commodity Futures Trading Commission. But getting it through the Senate requires Democratic backing—and disagreements over crypto holdings by officials and stablecoin rewards have made that support anything but certain.
Republican sponsors say the newest version incorporates 126 changes requested by Democrats. Among them is a role for state attorneys general in enforcing ethics restrictions, a provision President Donald Trump has agreed to.
Sen. Cynthia Lummis, the Wyoming Republican who chairs the Senate Banking Subcommittee on Digital Assets, is year of intense daily bipartisan negotiations, this bill is ready,” Lummis said in a statement. “Democrats got what they wanted; urging Democrats to support the revised bill.
“After a year of intense daily bipartisan negotiations, this bill is ready,” Lummis said in a statement. “Democrats got what they wanted; now they need to take yes for an answer.”
The shift matters because the earlier proposal placed enforcement of the ethics rules—aimed largely at Trump’s crypto ventures—solely with the Justice Department. Bernstein believes broader enforcement powers, combined with requirements involving divestment or blind trusts, could bring some Democrats closer to supporting the bill’s advance.
Why the Clarity Act Is Suddenly Getting Interesting
Not everyone is convinced the revisions amount to a deal.
“This is not a negotiated deal. Democrats are being presented with the final product,” TD Cowen analyst Jaret Seiberg wrote Monday. He continues to assign just a 25% chance that the legislation becomes law this year.
Beacon Policy Advisors is more optimistic, lifting its estimate to 30%-40%, up from below 10% previously.
The latest proposal also tackles one of crypto’s most contentious banking questions: stablecoin rewards. Under the revised language, the Treasury could restrict those rewards if they trigger substantial withdrawals from community banks.
Banking groups argue that reward programs could pull deposits away from banks that rely on them to fund lending. Crypto advocates, meanwhile, want those incentives to remain available. Both camps have been pressing senators in their home states.
The newest changes follow a September 10 draft that largely left the ethics provisions intact while adding registration requirements for crypto trading protocols controlled by individuals or groups.
If the Clarity Act ultimately stalls, the CFTC is not necessarily standing still. Chair Michael S. Selig has directed staff to explore crypto regulations using powers the agency already possesses.
Selig has also argued that legislation would offer protections that future administrations would have a harder time reversing—a reminder that the fight over the bill is about more than one Senate vote. It is also about how durable the United States’ crypto rules could become.