Bernstein said a Clarity Act failure would trigger a crypto selloff but regulators would step in. Coinbase and Circle face different stablecoin outcomes. JPMorgan warned earlier.
Bernstein warned Monday that failure to pass the Clarity Act in 2026 would likely hit crypto markets with another leg lower. The broker said prospects for the bill have dwindled as the Senate runs out of time before recess, even after resolving contentious issues like stablecoin yield rules.
“Clarity is the most consequential crypto market structure bill in U.S. history, but the chances of its 2026 passing seems to be dwindling,” analysts led by Gautam Chhugani wrote in a note.
The initial reaction to a stalling of the bill would be an immediate negative price move across digital assets, the analysts said. They argued the setback would probably be temporary. Regulators at the SEC and CFTC would accelerate rulemaking under the White House’s Project Crypto initiative, they said.
Token classifications, decentralized finance guidance, self-custody rules and innovation exemptions for token issuance are all areas where the analysts expect faster movement. They see continued White House support for tokenization, crypto derivatives and prediction markets even without the legislation.
The Clarity Act remains strategically important for permanent regulatory certainty, the report said. It would encourage banks, broker-dealers and exchanges to invest in blockchain infrastructure, clarify the securities-versus-commodities division, and establish a long-term framework for DeFi and digital assets that would survive future administrations.
Even if the bill stalls, Bernstein expects the crypto industry’s political influence to stay strong ahead of the U.S. midterms. The current downturn should end in late third quarter or early fourth quarter, helped by further White House policy support, the analysts said.
For listed companies, failure to pass would preserve the status quo on stablecoin regulation. Circle Internet Group would remain unable to offer yield directly as an issuer but could continue sharing distribution economics with partners, while Coinbase would keep offering yield on idle stablecoin balances. A recovery in USDC supply growth is the key catalyst for momentum in both stocks, the report added.
JPMorgan warned last week that fading odds for the Clarity Act are a setback for crypto. The bank said further delays could undermine one of the industry’s biggest regulatory catalysts.
JPMorgan carries an Alpha Score of 66 at AlphaScala, indicating moderate exposure to the legislative outcome. Coinbase scores 25 and Circle scores 28, both labeled Weak – reflecting their direct dependence on stablecoin regulation and the bill’s passing.
The Senate is in session until mid-December. The bill’s path will become clearer after the recess.
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