CLARITY Act Faces Diminishing Odds as Senate Deadline Looms
New York, NY – The path for the CLARITY Act, the landmark cryptocurrency regulation bill before Congress, is narrowing significantly in the Senate, according to a Monday warning from Jefferies analyst Andrew Moss and his team. Their assessment, based on Polymarket odds, suggests the probability of the bill’s passage by the end of 2026 has fallen to 48%, a sharp decline from 70% in mid-May.
Jefferies is now flagging increased near-term volatility for both cryptocurrency tokens and blockchain-related equities, as the legislative outcome appears to be crystallizing into a binary event.
The dip in prediction market confidence stems from three converging pressures: unresolved ethical provisions, ongoing disputes over language concerning illicit finance, and a Senate calendar that offers approximately 20 legislative days before the August recess.
Legislative Hurdles Mount
“Missing this window means the market structure bill doesn’t simply get rescheduled; it gets repriced entirely,” Moss and his colleagues stated in their note. “Failure to pass Clarity before the August recess could push the bill out to next year, or even later, if Democrats flip the Senate in November.”
Jefferies specifically identified Coinbase (COIN), Circle (CRCL), and Bullish (BLSH) as the crypto-linked equities most susceptible to legislative-driven market swings, in addition to certain digital tokens.
The CLARITY Act did clear the Senate Banking Committee on May 14 with a bipartisan 15-9 vote, including all Republican members and two Democrats, signaling initial momentum. However, the subsequent procedural hurdles present a more formidable challenge.
Before a full Senate vote can occur, lawmakers must reconcile two distinct committee-passed versions: the Banking Committee’s bill and the Senate Agriculture Committee’s Digital Commodity Intermediaries Act. This merged text then needs to be aligned with the House-passed H.R. 3633 (which was approved 294-134 in July 2025) and subsequently clear a 60-vote cloture threshold to overcome a potential filibuster.
These four distinct procedural gates are compressed into roughly 20 legislative working days before the recess. The Banking and Agriculture versions, for instance, contain substantively different approaches to the Commodity Futures Trading Commission’s (CFTC) jurisdiction over digital commodities, and no merged text has been publicly released as of late June.
Contentious Provisions and Shifting Political Landscape
Adding to the complexity, ethics provisions attached during committee markup have not yet achieved consensus. Some senators advocate for their removal, while others consider them non-negotiable. Furthermore, law enforcement agencies have voiced objections to specific language regarding decentralized finance (DeFi) exemptions, introducing another variable that could impede floor scheduling.
JPMorgan issued a similar warning earlier in June, cautioning that the crypto market structure bill might have a limited window for passage this year due to the tightening congressional calendar ahead of the midterm elections.
The debate surrounding stablecoin yields, which Standard Chartered estimates could redirect up to $500 billion in deposits if resolved favorably, remains an open issue complicating any rushed compromise. Should the bill extend beyond August, it would re-enter a Senate environment potentially reshaped by the November elections. A Democratic majority in the Senate could significantly alter the calculus for securing the necessary 60 votes.
Equity Exposure and Long-Term Clarity
While not the first sell-side warning regarding the timeline, the 22-point drop in Polymarket odds since mid-May provides stronger backing for Jefferies’ assessment than previous analyst commentary. Alex Thorn of Galaxy Digital had previously lowered his firm’s passage probability from 60% to 50% on June 26, citing calendar compression as the primary driver. Jefferies’ current position below that level suggests a growing consensus on the street for sub-50% odds as the base case.
The Jefferies note distinguishes itself by offering equity-specific granularity. For Coinbase, the exposure is direct, as its product suite, including staking, lending, and rewards on USDC holdings, operates within regulatory gray areas that the CLARITY Act would either legitimize or restrict. A delay preserves current ambiguity but also maintains enforcement risk, particularly given the Securities and Exchange Commission’s (SEC) demonstrated willingness to act on custody and yield products.
For Circle, the situation presents a more nuanced picture. The current bill text reportedly aims to close a loophole that allows third parties like Coinbase to offer rewards on USDC, potentially impacting USDC’s growth metrics. However, a delay would grant Circle more time to diversify its revenue streams beyond stablecoin reserve income before such a provision takes effect.
A critical detail often overlooked is the asymmetry in the delay scenario. Recent guidance from the SEC, CFTC, and OCC has improved the near-term operating environment for institutional crypto participants. However, Jefferies emphasizes that agency guidance is reversible. A future administration could revoke no-action letters and staff bulletins without legislative action. The CLARITY Act, conversely, would establish durable statutory clarity that agencies cannot unilaterally dismantle, a distinction that makes the bill significant beyond a single news cycle.
