Confidence that the US Congress will pass the CLARITY Act this year is waning as Senate floor time dwindles ahead of the August recess, with crypto policy observers warning that the calendar may now pose a greater threat to the legislation than partisan opposition.
Galaxy Research lowered its estimate of the bill's chances of becoming law to 60% from 75% on 5 Jun, citing a tightening Senate calendar and a shrinking window to secure floor consideration before the August recess.
The shift marks a reversal from the optimism that emerged after the bill was cleared by the Senate Banking Committee in May with bipartisan support after months of negotiations between crypto firms and banks.
Wintermute's head of policy and advocacy, Ron Hammond, said he currently places the odds of passage at roughly 45%, though he stressed the legislation still retains momentum.
Calendar risk
Both Galaxy and Wintermute point to the same challenge: time.
Galaxy argued that Senate leaders may struggle to find floor time for a bill that still requires debate, amendments and reconciliation with legislation being developed by the Senate Agriculture Committee. The firm said competing priorities, including national security legislation, have reduced the number of available legislative days before the August recess.
The next two to three weeks may prove key for the bill's prospects. According to Galaxy, it would raise its passage estimate if Senate leadership makes a credible commitment to bring the legislation to the floor in early-to-mid July and if lawmakers publicly signal that outstanding disputes over ethics rules and illicit finance have been resolved in a way that secures a bloc of more than nine Democratic votes. "Absent those signals in the next two to three weeks, the realistic path narrows to a post-recess effort in September, which runs directly into the midterm dynamics that make us cautious about the Fall," Galaxy Research head Alex Thorn wrote.
More than a crypto bill
The CLARITY Act would establish a federal framework for digital asset markets and clarify the division of regulatory authority between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Hammond said many large financial institutions remain hesitant to deepen their involvement in digital assets without legislation, even as regulators have adopted a more accommodating stance towards the industry. "It [CLARITY Act] definitely clarifies which tokens we can trade and not trade," he said.
Narrowing window
With the path forward increasingly dependent on Senate scheduling decisions, supporters warn that failure to pass market structure legislation this year could make reform efforts considerably more difficult should the midterm elections reshape the balance of power in Congress, as is widely expected. Hammond suggested the next realistic opportunity would likely not come until 2030.
