CLARITY Act Has a 75% Chance of Dying Before September Vote

TD Cowen put a number on it: 75%. That is the firm's assessed probability that the CLARITY Act will not become law this fall. The bill has crawled through Congress for over a year and still cannot find solid ground in the Senate.

The legislation tries to draw a clean line between SEC and CFTC jurisdiction over digital assets. Digital commodities would fall to the CFTC. Investment contracts stay with the SEC. Simple enough in theory. In practice that split has triggered months of back-and-forth between the two agencies, their congressional allies, and an industry that cannot agree on what it wants either.

The Senate Banking Committee voted 15-9 to advance the bill. But a committee vote and a floor vote are different animals. Right now the floor looks like a minefield.

Democrats are not playing along quietly. They want changes to the ethics provisions and the Bank Secrecy Act sections of the bill. If Republicans block votes on those amendments, Democrats can refuse to let debate close. The whole thing grinds to a halt. Senator Cynthia Lummis has released updates to the Act, but those have not bridged the gap yet.

There is a messier political problem too. Some Republican senators may want to sidestep a confrontation over President Donald Trump's crypto holdings and the opposition from law enforcement groups. Majority Leader John Thune has filed cloture, the procedural move to force a vote. Filing cloture does not guarantee anything actually happens. A September 15 agreement would reduce that risk, but it is not locked in.

Then there are stablecoins. The question of whether digital asset providers can offer a return on stablecoins has split senators and the banking industry sharply. That one dispute alone could tank negotiations that might otherwise have a shot.