CLARITY Act probability slashed to just 10% by Galaxy Digital
In a sharp downward revision, Galaxy Digital now projects only a 10% likelihood of the CLARITY Act passing by 2026, pointing to lingering political hurdles and limited Senate time following the September recess.
Galaxy Digital has reduced its projection for the likelihood that the Digital Asset Market Clarity (CLARITY) Act will successfully pass by 2026 to just 10%.
The firm cautioned that numerous political challenges have yet to be resolved and that the Senate will be left with merely two to three weeks for passage when legislative sessions resume on Sept. 14.
In the absence of an immediate motion to proceed vote taking place the moment legislators reconvene in Washington, sufficient time would exist for the CLARITY Act to advance through the Senate only if the legislation "dominates basically the entire working session," according to Alex Thorn, Galaxy's head of firmwide research, who shared his analysis in a Friday post on X.
Thorn further noted that legislators would need to navigate through several contentious matters, including establishing ethics guidelines regarding government officials' participation in cryptocurrency activities and managing pushback from banking institutions concerning provisions related to stablecoin yield offerings.
Galaxy reduced its prior projection from 60% down to 50% on June 26, following an earlier reduction from 75% to 60% on June 6. The firm's 75% projection had been established on May 22.
The CLARITY Act seeks to create the first comprehensive regulatory framework for digital assets in the US, though it has encountered significant criticism. The legislation successfully passed through the Senate Banking Committee in May, but faced opposition from most Democrats and the banking industry, who contended that it would permit crypto firms to provide yields on stablecoins while avoiding the same regulatory requirements imposed on traditional banks.
In early June, more than 200 crypto companies and organizations called upon the US Senate to approve the CLARITY Act through a letter that was distributed by Stand With Crypto, a crypto advocacy group.