The landscape for the CLARITY Act, a crucial piece of legislation aimed at structuring the cryptocurrency market, has shifted once again, with Galaxy Research analyst Alex Thorn reducing the odds of its passage in 2026 from 60% to 50%. This adjustment comes on the heels of the bill successfully clearing the Senate Banking Committee on May 14 with a 15-9 vote, but without any scheduled floor debate date.
As the Senate gears up for its August recess by the end of July, time is rapidly running out for the CLARITY Act. The bill currently sits at number 423 on the Senate legislative calendar, and its prospects are dimming due to a combination of a crowded agenda and unresolved issues surrounding the bill itself.
Senate Losing Days to Other Priorities
Recent developments in the Senate have not favored the CLARITY Act. A week was lost to debates over an anti-weaponization fund, and a failed procedural vote regarding the reauthorization of Section 702 of the Foreign Intelligence Surveillance Act (FISA) has further complicated matters. With Section 702 set to expire soon, much of the Senate’s floor time in the coming weeks will be devoted to resolving that issue, leaving little room for crypto legislation.
Each of these delays, while seemingly minor on their own, cumulatively erode the limited time available for the CLARITY Act to gain traction. For the bill to advance, Senate Majority Leader John Thune must allocate time for it on the Senate floor. However, the bill still requires debate, amendments, and reconciliation with a related Senate Agriculture text before it can even reach the House.
Democratic Votes Are Still Not Locked In
In addition to timing issues, there remains a fundamental challenge regarding party support. Senate Democrats, led by Ruben Gallego, have indicated that additional ethics provisions must be resolved before they can back the legislation. These provisions were deferred during committee discussions and remain a sticking point.
The bill requires at least 60 votes to progress, and Galaxy Research anticipates that two Republican senators, Josh Hawley and Rand Paul, are likely to oppose it, based on their previous votes against similar legislation. This leaves little incentive for Thune to prioritize floor time without assurance of Democratic support.
What Could Change the Outlook
Thorn has indicated that his assessment could improve if Thune publicly commits to scheduling floor time in early to mid-July, alongside a resolution regarding the ethics and illicit finance questions that currently hinder progress. Additionally, merging the Banking and Agriculture Committee texts into one cohesive package would bolster the bill’s prospects.
However, if these indicators do not materialize in the next few weeks, Galaxy Research suggests that the CLARITY Act’s realistic path to passage may shift to September. Yet even then, the approach would face challenges due to the impending midterm election dynamics, which could lead to a scarcity of available floor time as legislators focus on their campaigns.
Currently, Galaxy Research maintains that the CLARITY Act is still more likely than not to pass by 2026, albeit with a narrowing margin. As the legislative clock ticks down, stakeholders in the crypto industry are left watching closely to see how these developments unfold.
