The future of cryptocurrency regulation in the United States is looking increasingly uncertain. Galaxy Digital has drastically reduced its forecast for the Digital Asset Market Clarity (CLARITY) Act, dropping the likelihood of its passage in 2026 to a mere 10%. This pessimistic outlook stems from a combination of unresolved political debates and an incredibly tight congressional schedule, leaving the landmark crypto bill hanging by a thread.
Why the CLARITY Act is Losing Momentum in the Senate
The primary hurdle facing the CLARITY Act is a severely compressed legislative timeline. When lawmakers return to Washington on September 14, the Senate will have only about two to three weeks of working sessions. According to Alex Thorn, Galaxy Digital’s head of firmwide research, this narrow window leaves almost no room for error. In a recent post on X, Thorn explained that unless the Senate initiates a motion to proceed immediately upon their return, the bill would need to dominate the entire working session just to have a chance at passing.
Beyond the ticking clock, lawmakers are still tangled in complex debates over the bill’s finer details. Key unresolved issues include establishing ethics rules for government officials involved in the cryptocurrency space and ensuring adequate protections for software developers. Furthermore, traditional banks are placing heavy pressure on legislators regarding stablecoin yield provisions. The banking industry, alongside several Democratic lawmakers, argues that the current framework would allow crypto firms to offer lucrative yields on stablecoins without having to comply with the strict regulatory requirements imposed on traditional financial institutions.
This latest downgrade to 10% marks a steep decline in optimism over the past few months. Galaxy Digital initially estimated a strong 75% chance of passage back on May 22. As legislative hurdles became more apparent, those odds were steadily cut to 60% on June 6, then down to 50% on June 26, before plummeting to the current 10% forecast.
The Crypto Industry’s Push for Regulatory Clarity
The CLARITY Act was designed to be a historic milestone, aiming to establish the very first comprehensive regulatory framework for digital assets in the United States. It initially showed great promise, successfully clearing the Senate Banking Committee in May. However, the subsequent pushback from the banking sector and political skeptics has heavily stalled its momentum.
Despite the dwindling odds, the cryptocurrency sector has heavily rallied behind the legislation. At the beginning of June, more than 200 crypto organizations and companies joined forces to urge the US Senate to pass the bill. In a collective letter shared by the prominent crypto lobbying group Stand With Crypto, industry leaders emphasized that clear regulations are essential to keep the US competitive in the global digital asset market. Whether this unified industry pressure will be enough to overcome the Senate’s tight September schedule remains to be seen, but for now, the CLARITY Act faces a steep uphill battle.
