Galaxy Digital cuts CLARITY Act odds to 60%

Galaxy Digital lowered its estimate that the CLARITY Act will become law in 2026 to 60% from 75% in a client note, attributing the downgrade to a shrinking Senate calendar and unresolved ethics and illicit-finance disputes.

The CLARITY Act would create a federal framework for digital assets and clarify whether token activities fall under the SEC or the CFTC. The bill cleared the Senate Banking Committee on May 14 by a 15-9 vote.

Before becoming law, the measure must secure 60 votes on the Senate floor, survive debate and amendments, be reconciled with a separate Senate Agriculture Committee text, pass the House and receive the president’s signature. Galaxy’s analysts wrote those steps must fit into a narrowing window before the Senate’s August recess, scheduled to begin at the end of July.

Senate leaders have lost floor time to other priorities. Lawmakers spent days on a dispute over an anti-weaponization fund while working on an ICE and Border Patrol funding package. The chamber also failed to advance reauthorization of Section 702 of the Foreign Intelligence Surveillance Act in a 47-52 procedural vote, leaving another item to resolve before the surveillance authority lapses on June 12.

Substantive disagreements remain. Democrats led by Sen. Ruben Gallego are pushing for ethics provisions aimed at addressing conflicts of interest among market participants and oversight officials. Illicit-finance advocates seek stronger anti-money-laundering and sanctions safeguards. The Senate Banking and Agriculture committees must merge differing approaches into a single text.

A central policy fight involves stablecoins and whether crypto firms can offer yield on stablecoin balances. The CLARITY Act is understood to prohibit passive yield-payments made solely for holding stablecoins-while permitting rewards tied to payments, transactions, loyalty programs and trading incentives.

Banking groups warn that interest-like payments on stablecoins could pull deposits from banks while avoiding bank regulatory requirements. Crypto firms contend activity-linked rewards support payments innovation and consumer adoption. An American Bankers Association survey found consumer support for protecting local lending and the financial system from risks tied to interest-like stablecoin rewards.

JPMorgan analysts highlighted a similar narrowing of the legislative window and noted the midterm election calendar could delay or change market-structure reform for crypto. Observers say a compromise reached before the elections could differ from one negotiated afterward.

Galaxy wrote that the bill’s prospects would improve if Senate leadership commits floor time in early to mid-July, if lawmakers bridge the ethics and illicit-finance disputes, and if the Banking and Agriculture committees produce a combined package ready for debate. Without those signals, the effort is likely to move into September, when campaign season and a crowded agenda could alter negotiations or push the issue to the next Congress.