Wall Street is skeptical that Washington will deliver a landmark crypto law this year. TD Cowen analyst Jaret Seiberg has put the odds of the Digital Asset Market Clarity Act (CLARITY Act) be
Wall Street is skeptical that Washington will deliver a landmark crypto law this year. TD Cowen analyst Jaret Seiberg has put the odds of the Digital Asset Market Clarity Act (CLARITY Act) becoming law this fall at just 25%, giving the bill a 75% chance of failure before year-end.
The warning follows a bruising legislative stretch for the bill. On August 8, Senate Majority Leader John Thune filed cloture on the motion to proceed just before the chamber left for its summer recess.That sets up the first procedural vote for Tuesday, September 15, the day after senators return.Cloture requires 60 yes votes to move forward.
Analysts at TD Cowen stated in a research note that the bill now has a 25% probability of passing in September, and a 75% probability that it will not become law this fall due to ongoing partisan disputes. Seiberg's note was direct: "The bill is not dead, but the path forward is harder."
One scenario outlined by TD Cowen involves initial approval of cloture but then Republicans opposing Democratic amendments regarding ethics and anti-money laundering measures, which could lead Democrats to block the second cloture vote and prevent final passage.The bank also said it was plausible that no cloture vote takes place at all, leaving the bill in legislative limbo.
One of the biggest sticking points involves growing pressure to add conflict-of-interest rules that would prevent the President, Vice President, and members of Congress from actively trading cryptocurrencies.Seiberg noted that Republicans may also grow reluctant to bring the bill to a floor vote if doing so forces them to vote on conflict-of-interest amendments.
At stake is a major overhaul of how digital assets are policed in the United States. The Clarity Act seeks to clearly define what qualifies as a blockchain and a cryptocurrency, which is key to determining whether cryptocurrencies are regulated by the CFTC or the SEC.The bill passed the House of Representatives last year, though some Republicans have accused Democrats of stalling it in the Senate.
The bill requires 60 votes in the Senate for passage, and following the August delay the odds of the Clarity Act meeting that threshold fell from 25% to 16% on the prediction platform Kalshi.Trump would also need to sign off before the Clarity Act could move forward as a bipartisan bill.
SourcesTD Cowen assigns 25% chance for Clarity Act to pass in September (Coin Turk)U.S. Senate opens first stage of Clarity Act voting (CoinDesk)Senate delays Clarity Act vote, passage odds plummet (Motley Fool)
