The Digital Asset Market Clarity Act, often referred to as the CLARITY Act, now faces significantly diminished prospects in the U.S. Senate. Investment bank TD Cowen, a division of TD Securities, has dramatically reduced its probability assessment for the bill’s passage this fall to just 25%.
This stark outlook, issued in a note on Monday, August 10, 2026, follows a critical vote delay and persistent political disagreements that have clouded the bipartisan crypto legislation.
Legislative Hurdles Mount for Crypto Bill
Lawmakers had initially hoped to push the comprehensive crypto market structure bill to a vote before the five-week August recess. But that timeline slipped last week, postponing the Senate’s consideration until September. The delay, coupled with lingering disputes over ethics clauses and banking sector opposition, means the bill’s path forward looks considerably harder, according to TD Cowen.
TD Cowen’s revised forecast signals a tough road ahead for the CLARITY Act, formally known as H.R. 3633. The bill aims to establish a much-needed federal rulebook for U.S. cryptocurrency markets, defining the jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over digital assets.
This clarity is a long-standing demand from the crypto industry, which currently navigates a patchwork of state and federal regulations.
Jaret Seiberg, managing director at TD Cowen’s Washington Research Group and a key analyst tracking the bill, has been vocal about the dwindling chances. He noted that while the bill isn’t “dead,” the confluence of factors makes its ultimate passage uncertain.
One significant risk, according to TD Cowen, is that an initial procedural vote, known as cloture, might pass in September. However, Republicans could then block Democratic amendments on ethics and anti-money laundering (AML) sections, leading Democrats to sink a second cloture vote and effectively halt the bill.
Ethics Clause Stirs Political Divisions
A major point of contention centers on a bipartisan ethics clause integrated into the latest draft of the CLARITY Act. This provision, which began circulating in July, would prohibit government officials — including the President — from promoting or financially benefiting from cryptocurrency while in office.
The clause has drawn sharp criticism from some Democrats, including Senator Elizabeth Warren, who claimed new legislation might disproportionately benefit the president and his family, especially given recent reports of Trump-linked crypto ventures.
Conversely, some Republicans have accused Democrats of intentionally stalling the bill. Despite the bipartisan nature of the ethics language, its inclusion has proven divisive. Sens. Thom Tillis and Ruben Gallego reportedly submitted compromise language on these ethics provisions to the White House, highlighting the difficulty in finding common ground.
Banking Industry Stance and Stablecoin Yields
The banking sector also remains a significant obstacle to the CLARITY Act’s passage. Major financial institutions, including Goldman Sachs and Fidelity, have publicly backed the bill, seeing value in regulatory clarity. Yet, the broader banking industry, particularly small banks, continues to oppose certain aspects of the legislation. Their primary concern revolves around unresolved issues regarding stablecoin yield provisions.
Banks have largely dismissed a report from the White House Council of Economic Advisers, which suggested that banning stablecoin yield would only increase bank lending by a marginal $2.1 billion, or 0.02% of total loans. This lukewarm reception indicates that the banking lobby’s concerns are deeper than what this analysis addresses, contributing to the legislative gridlock.
A Bumpy Legislative Journey and Shifting Odds
The CLARITY Act has already navigated a complex legislative path, gaining significant momentum before hitting its current snags. It successfully passed the U.S. House of Representatives by a substantial vote of 294-134 in July 2025.
Following that, it cleared the Senate Banking Committee in May 2026 with a 15-9 vote, placing it on the Senate’s legislative calendar since June 1, 2026, and making it eligible for a floor vote.
But the bill’s prospects have steadily declined over recent months. TD Cowen itself had raised its probability assessment to 40% in May, up from approximately 33%, after the Senate Banking Committee advanced it.
However, by June, Jaret Seiberg of TD Cowen was already expressing skepticism, questioning whether the bill could realistically pass before the upcoming November midterm elections. Other forecasts mirrored this downward trend: Polymarket traders lowered their odds to 25% in July, down from 30%, while Galaxy Research cut its estimate to 50% from 60% in June.
The scheduled procedural vote on September 15, 2026, for cloture on the motion to proceed to H.R. 3633, will be a critical indicator. TD Cowen expects the Senate to begin formal consideration of the CLARITY Act in mid-July. This delay, however, created a vacuum for further political infighting and reduced the window for consensus.
What This Means for US Crypto Regulation
Should the CLARITY Act ultimately fail to become law this fall, it would signify a continued period of regulatory uncertainty for the U.S. cryptocurrency market. The bill’s core objective was to reduce confusion, strengthen investor protections, and provide stability through clear definitions for digital assets.
It also aimed to introduce a “mature blockchain” test, designed to determine when a network has decentralized sufficiently to exit SEC supervision.
The inability to pass this legislation, despite strong support from major financial institutions and law enforcement groups, suggests that the U.S. is struggling to establish a coherent, comprehensive framework for digital assets.
Digital Currency Group, the parent company of Grayscale, even sent a letter to Senate Majority Leader John Thune and Senate Minority Leader Chuck Schumer, urging a vote before the recess. Their argument was that ongoing regulatory uncertainty drives U.S. crypto investment and jobs overseas, putting the nation at a competitive disadvantage.
Treasury Secretary Scott Bessent has also called for the Senate to vote on the legislation “now,” underscoring the perceived urgency. But with the odds now firmly against it, the crypto industry may need to prepare for further delays and continued ad-hoc enforcement by existing agencies rather than a clear, unified federal rulebook.
This situation could further complicate innovation and market growth within the country, potentially solidifying the U.S.’s position behind other jurisdictions that have moved more decisively on crypto regulation.