Galaxy Cuts CLARITY Act Passage Odds To 50% As Senate Calendar Tightens

Galaxy Digital reduced their 2026 odds for the CLARITY Act being passed into law from 50%, stating that the U.S. Senate is running short on time to pass a crypto market structure bill prior to the August recess when members of Congress will be leaving Washington. The updated forecast came from Galaxy's head of firm-wide research, Alex Thorn; he indicated that the decrease in odds is due to a growing concern about whether there will be sufficient time to pass the legislation and not due to the contents of the bill. In his writing, "we have decreased our odds of passing the CLARITY Act in 2026 to 50-50," Thorn referenced three factors contributing to this decline in probability: 1) there is no unified Senate Banking-Agriculture text, 2) there is no confirmed floor schedule, and 3) there is a limited amount of time remaining for the Senate to act. The CLARITY Act is a highly anticipated crypto policy bill in the U.S. It seeks to establish a clear regulatory framework for digital assets by establishing standards for supervision of crypto markets and determining which federal agency(s) should supervise various segments of the industry. Many crypto companies, investors, and exchanges view the CLARITY Act as an important first step toward decreasing regulatory uncertainty in the U.S. digital asset market.

However, with competing legislative priorities and a full legislative calendar, it is unlikely that the CLARITY Act will see a smooth journey through Congress. Prior to the latest reduction in odds, Galaxy Digital made two revisions to their estimates. On May 22nd, Galaxy increased their estimate of the bill's passage to 75%. On June 9th, Galaxy decreased their estimate of the bill's passage to 60%. With the most recent revision, Galaxy now estimates the likelihood of the bill passing at 50/50.

SENATE FLOOR TIME BECOMES MAJOR CHALLENGE

Thorn stated that there may be no longer any major obstacles in the way of passing the CLARITY Act.

However, there are limited amounts of time remaining in which the Senate can consider action regarding the CLARITY Act. The Senate was scheduled to enter a state-wide work period Monday and will likely stay out of Washington until July 10. The Senate is also planning to enter its annual recess beginning August 8th and returning September 14th. This leaves very little time for the Senate leadership to finish developing a final version of the CLARITY Act, settle any disputes among committees and schedule the CLARITY Act for a vote. According to Thorn, the length of time available to pass legislation has "been decreasing rapidly," particularly with President Donald Trump adding yet another high-profile issue to Congress' legislative calendar with his announcement that he would not sign a bipartisan housing bill unless Congress first passed the SAVE Act, a bill requiring proof-of-citizenship for voters. According to Thorn, the fight over the SAVE Act is creating an additional political hot-button issue in an already crowded Senate queue, creating even fewer opportunities for crypto-related legislation to be voted upon.

OTHER MUST-PASS BILLS ADD PRESSURE

The CLARITY Act is one of many legislative priorities currently being considered by Congress. Thorn points out that Congress has yet to complete action on reauthorizing Section 702 of the Foreign Intelligence Surveillance Act, or FISA, as the House did not approve a new version of the reauthorization.

Additionally, the Senate is scheduled to begin debate on the Fiscal Year 2027 National Defense Authorization Act, an annual defense spending authorization bill which is always high-profile and serves as a vehicle for a number of other policy debates. All these legislative items will require substantial time and resources from the Senate's leaders, thereby diminishing the likelihood that legislation regulating the digital assets market will receive sufficient consideration to move through Congress prior to the summer recess.

While there are many members of Congress interested in creating clear guidelines regarding how the digital assets market operates, it appears that the congested schedule may be the greatest obstacle to passage of the CLARITY Act.

CRYPTO INDUSTRY PUSHES FOR REGULATORY CLARITY

The CLARITY Act is being strongly supported by many members of the cryptocurrency community who believe that the U.S. requires clear regulations governing digital assets. In early June, over 200 crypto businesses and associations sent a letter to the U.S. Senate asking them to vote in favor of the bill; this letter was distributed by Stand With Crypto, an advocacy group representing crypto investors. Proponents of the CLARITY Act argue that the bill will provide greater regulatory certainty for cryptocurrency exchanges, token issuers, developers and investors. They also claim that establishing clearly defined regulatory requirements will assist the U.S. in remaining competitive within the global digital asset market.

However, the CLARITY Act has faced opposition from Democratic lawmakers, banking associations and public interest organizations. Critics of the CLARITY Act have expressed concern that some sections of the bill may enable crypto firms to provide yield-bearing investment options (including services that involve stablecoins) without meeting the same regulatory standards that are currently imposed upon traditional financial institutions. Later in June, multiple law enforcement agencies and a coalition of Catholic organizations contacted White House officials expressing concern that the CLARITY Act would leave gaps in oversight regarding both illegal financial activities and supervision of the markets.

HOUSE HEARING SET FOR JULY 17

As Congress continues to discuss U.S. crypto regulations, the CLARITY Act is set to go through a House hearing on July 17. The CLARITY Act was passed by the Senate Banking Committee in May; however, there were many objections from the majority of Democrats and a portion of the banking industry. Whether the CLARITY Act will be able to pass out of Congress will depend upon if Senators can come to an agreement on the language of the act and whether leadership is willing to allow for floor time prior to the August recess. How digital assets business operations in the United States will be shaped will depend upon the results of the CLARITY Act. Lawmakers have challenges ahead including attempting to balance innovation, investor protections, market oversight, and political timing within a very busy legislative schedule during this election year.