TD Cowen Puts Crypto Clarity Act Passage Odds at 25%

The crypto Clarity Act has a one-in-four chance of passing the Senate this fall, TD Cowen said in a Monday note. Lawmakers had hoped for a vote before the five-week August recess. That vote was postponed, pushing the timeline to September.

The investment bank outlined two likely outcomes. In one, cloture passes initially. Republicans then block Democratic amendments on ethics and anti-money laundering sections. Democrats sink the second cloture vote. The other scenario is that no cloture vote happens at all.

Cloture is the Senate's procedural tool for ending debate on a bill so it can move to a final vote. TD Cowen assigned a 75% probability that the bill fails to become law this year.

"The bill is not dead. The path forward is harder," TD Cowen said.

Without a federal framework, crypto exchanges and issuers will continue dealing with a patchwork of state laws and SEC enforcement actions. Institutional backers like Goldman Sachs and Fidelity have supported the bill, signaling demand for clear rules. A failure this fall could push more firms to operate outside the U.S. where regulatory regimes are more defined.

Goldman Sachs, a supporter of the Clarity Act, carries an AlphaScala score of 49/100, a Mixed signal for the stock.

Democrats including Senator Elizabeth Warren have criticized the bill. Warren argued it would benefit the president and his family. The latest draft includes a ban on government officials promoting or profiting from crypto. The language was drafted by both parties. Still, Warren's opposition reflects deeper partisan divides.

The House passed the bill last year. Bipartisan work went into the current version. Some Republicans have accused Democrats of deliberately stalling.

The Senate returns from its August recess in September. The cloture vote, if it happens, will be the first test of the bill's prospects.