Galaxy Digital trims CLARITY Act passage odds to 50% as Senate calendar tightens
Galaxy Digital has again scaled back its expectations for the landmark CLARITY Act, now assigning just a 50% probability that the crypto market structure bill will become law by 2026. The firm cites an increasingly congested Senate calendar and a rapidly shrinking legislative window ahead of the chamber’s long August break.
The revised forecast marks the second downgrade in just a few weeks. On June 9, Galaxy reduced its odds from 75% to 60%, after having lifted them to 75% on May 22. The latest cut to a coin-flip reflects mounting concern that, even with bipartisan backing, the bill may simply run out of time on the Senate floor.
Alex Thorn, Galaxy Digital’s head of firmwide research, stressed that the reassessment is driven by timing rather than any weakening of the bill’s fundamentals. According to Thorn, three key obstacles now stand in the way: the absence of a unified legislative text between the Senate Banking and Agriculture Committees, the lack of a firm commitment from leadership to bring the bill to a floor vote, and the narrowing number of legislative days before lawmakers depart Washington.
August recess looms over crypto legislation
The US Senate entered a state work period starting this week and is not scheduled to reconvene for regular floor business until July 10. Shortly after that, on August 8, senators are expected to leave town for a traditional five‑week August recess, returning only in mid‑September.
With only a limited number of working days before that break, leadership must prioritize among a long list of pending items. Thorn argues that this competition for floor time has intensified in recent days, further diminishing the chances that the CLARITY Act can move swiftly enough to stay on track for 2026 enactment.
The immediate catalyst for that intensifying competition was the abrupt decision by US President Donald Trump to halt the signing of a bipartisan housing bill. The president has insisted he will not sign the measure until Congress first passes the SAVE Act, an elections bill that would require proof of citizenship for voting. Thorn noted that this confrontation has injected “another contentious, leadership‑consuming fight into an already crowded queue,” diverting attention and procedural bandwidth that might otherwise have been available for the crypto bill.
CLARITY Act: first comprehensive US framework for digital assets
The CLARITY Act is designed to establish the first broad, nationwide regulatory framework for digital assets in the United States. Among other provisions, it seeks to clarify the jurisdictional roles of various regulators, define how certain digital assets should be classified, and outline permissible activities for crypto firms, exchanges, and issuers.
Supporters argue that the legislation would finally move the sector away from regulatory uncertainty and case‑by‑case enforcement actions, giving both established institutions and startups clearer rules of the road. Proponents say this could encourage more responsible innovation, attract long‑term capital, and make the US more competitive against jurisdictions that have already adopted comprehensive crypto regulations.
However, the bill has not been without controversy. When it advanced through the Senate Banking Committee in May, it drew resistance from most committee Democrats and from segments of the traditional banking industry. Critics contend that the framework, particularly around stablecoins, could let crypto platforms offer yield‑bearing products without being subject to the same capital, liquidity, and consumer‑protection standards as banks and other regulated financial institutions.
House hearing set as Senate stalls
On the House side, the CLARITY Act is still moving forward procedurally. A hearing has been scheduled for July 17, giving representatives a chance to publicly examine the bill’s key provisions, question stakeholders, and debate its possible consequences for markets and consumers.
This creates a split‑screen dynamic: while the House continues to gather momentum and build a record around the legislation, the Senate is struggling to carve out the time and political focus needed to move the measure to the floor. For Galaxy and many in the industry, the concern is less that the bill will be defeated outright than that it will get pushed down the priority list until the calendar simply closes on it.
Galaxy’s downgrade underscores that even favorable committee votes and bipartisan sponsorship do not guarantee that complex, sector‑reshaping legislation will receive floor consideration, especially in a year marked by election pressures and multiple competing policy fights.
High‑stakes competition for Senate floor time
The CLARITY Act must now jostle for attention with several high‑priority items that Senate leadership views as more urgent or unavoidable.
One of those is Section 702 of the Foreign Intelligence Surveillance Act (FISA). The House has so far failed to pass a reauthorization, leaving a critical national security authority in limbo. Debates around FISA are often politically explosive, touching on surveillance, civil liberties, and executive power – all topics that can consume days of floor debate and amendment votes.
Another major competitor is the National Defense Authorization Act (NDAA) for the 2027 fiscal year. The NDAA is widely considered “must‑pass” legislation, as it funds core defense programs and sets major security priorities. Because of its must‑pass status, lawmakers frequently try to attach unrelated policy provisions to the NDAA, further increasing the time and political capital required to move it through both chambers.
In this environment, the CLARITY Act is vying for time against bills that carry immediate political and national security implications. Thorn’s 50% probability reflects the risk that, even with broad support, the crypto bill could simply get squeezed out of the schedule.
Support and pushback beyond Capitol Hill
The battle over the CLARITY Act is not confined to Congress. In early June, more than 200 crypto companies and organizations publicly called on the Senate to pass the bill, arguing that the current patchwork of regulations and enforcement actions is stifling innovation and pushing activity offshore. Industry advocates say that without a clear federal framework, US consumers and businesses are exposed to uneven protections and legal uncertainty.
Later in the month, however, a coalition of law enforcement groups and Catholic organizations contacted senior administration officials to voice nearly opposite concerns. They warned that the proposed framework could introduce oversight gaps that might be exploited by bad actors, potentially making it harder to detect money laundering, terrorist financing, or other forms of illicit activity.
This split illustrates the core tension at the heart of crypto policy debates: how to foster technological and financial innovation while maintaining robust safeguards against abuse. The CLARITY Act has become a proxy fight over where that balance should lie, and who should draw the lines.
Why the odds matter for markets
Galaxy Digital’s shifting probability estimates are closely watched by traders, institutional investors, and corporate strategists who are trying to gauge the regulatory trajectory of the US crypto market. Even though these are internal assessments rather than formal forecasts, they influence perceptions about how aggressively firms should expand in the US, where to allocate capital, and how to price regulatory risk.
A 75% probability signaled to many that a comprehensive framework was very likely on the horizon, perhaps encouraging more long‑term planning around US‑based operations and product launches. The move down to 60%, and now to 50%, suggests a much more uncertain path, where timing becomes as important as substance.
For some market participants, a slower or more uncertain legislative timeline could mean continued reliance on regulatory guidance, enforcement actions, and court decisions to define the boundaries of acceptable behavior. That, in turn, can keep compliance costs high and discourage more cautious institutions from entering the space at scale.
Implications for US crypto competitiveness
If the CLARITY Act stalls or fails outright, the US risks falling further behind jurisdictions that have already implemented crypto frameworks. Several regions have moved ahead with detailed regulations for exchanges, stablecoins, custody services, and token issuances. These regimes may not be perfect, but they provide a degree of predictability that businesses often prefer over ambiguity.
Without a clear federal law, US crypto policy will likely continue to evolve through agency rulemaking and litigation. This can produce uneven outcomes as different courts interpret statutes differently and various regulators assert overlapping authority. Companies may respond by prioritizing growth in jurisdictions with straighter regulatory paths, potentially weakening the US role in shaping the next generation of financial infrastructure.
At the same time, delay does not necessarily mean the end of crypto legislation in the US. Lawmakers could attempt to break off pieces of the CLARITY Act into smaller, more targeted bills-such as those focused only on stablecoins or on defining which assets qualify as securities versus commodities-that may be easier to move through a crowded calendar.
What to watch in the coming months
Several milestones will determine whether Galaxy’s 50‑50 call ultimately proves too pessimistic or not pessimistic enough:
1. House hearing on July 17
The tone and substance of this hearing will reveal how much bipartisan appetite there is in the House, and whether lawmakers coalesce around any amendments aimed at appeasing skeptics in both parties.
2. Post‑recess priorities
When the Senate returns in mid‑September, leadership will face a compressed timeline before the end of the year. Whether the CLARITY Act is included in any announced priority list will be a strong signal of its near‑term prospects.
3. Potential attachment to other legislation
In theory, crypto provisions could be folded into larger legislative vehicles, including financial services packages or even the NDAA, though doing so would carry political and procedural risks.
4. Shifts in the broader political climate
Election‑year dynamics could either help or hurt the bill. A surge in public attention to crypto-whether from a market shock, a major enforcement action, or a high‑profile technological milestone-could push lawmakers to act, or make them more cautious.
The tension between “must‑pass” and “should‑pass”
The CLARITY Act sits in an uncomfortable middle ground: widely seen by its backers as a “should‑pass” modernization of financial regulation, but not yet elevated to the category of “must‑pass” legislation that leadership will prioritize above all else. National security, defense funding, and pressing domestic policy fights almost always take precedence in an election cycle, especially when the legislative clock is ticking.
Galaxy’s latest downgrade is a recognition of that reality. The bill’s substance has not fundamentally changed, and neither has the underlying need for regulatory clarity in the digital asset space. What has changed is the sheer number of competing demands on Senate time and attention, many of which carry more immediate political consequences.
For now, the path to a comprehensive US crypto framework is still open-but narrower than it appeared just a month ago. Market participants, policymakers, and advocates will spend the coming months watching to see whether the CLARITY Act can climb back up the priority list, or whether its fate will be deferred to yet another Congress and another regulatory cycle.