Senate Faces Tight Legislative Calendar as CLARITY Act Passage Probability Drops Below 50%
Investment bank Jefferies released a report on the U.S. CLARITY Act, noting that while the bill previously passed the Senate Banking Committee with a bipartisan vote of 15 to 9, it still faces substantial legislative obstacles in the full Senate. With only approximately 20 legislative days remaining before the August congressional recess, the Senate must complete bill consolidation, procedural votes, coordination with the House version, and submission to the president for signature – a timeline Jefferies describes as extremely tight. Data from the prediction market Polymarket indicates that the probability of the CLARITY Act passing by the end of 2026 has dropped from 70% in mid-May to 48%, reflecting growing market skepticism about legislative progress.
Jefferies believes that developments related to the legislation in the coming weeks will likely exacerbate crypto market volatility. Should the bill pass successfully, it would establish a clear regulatory framework for digital assets, encouraging banks, asset managers, and exchanges to accelerate their deployment of tokenized assets, custody, staking, and lending services. It could also facilitate the launch of more crypto ETFs and initial public offerings by crypto infrastructure companies. Conversely, if the legislation is delayed, regulatory uncertainty will persist, potentially causing traditional financial institutions to slow down their blockchain-related business initiatives.
Market Impact on Crypto Stocks and Assets
The report projects that the legislative process will continue to affect the market performance of crypto-related stocks including Circle (CRCL), Coinbase (COIN), and Bullish (BLSH), as well as certain crypto assets. Jefferies points out that the clarity or lack thereof in regulation directly influences institutional willingness to enter the space, which in turn affects the pace of business expansion and valuation logic for these companies. In the short term, the presence of legislative uncertainty may amplify the volatility of related assets.
Stablecoin Competition Intensifies: Circle Faces Long-Term Headwinds
Jefferies also emphasizes that from a long-term perspective, the bigger challenge for stablecoin issuer Circle is not regulatory changes but competition from banks, fintech companies, and payment firms. As more traditional financial institutions enter the stablecoin arena, Circle's advantages in payment use cases and user base could erode. While the CLARITY Act, if enacted, would provide a compliance framework, the shifting competitive landscape is the core issue Circle must navigate.