Senate Time Window and Legislative Hurdles
Investment bank Jefferies, in its latest report, highlights that the U.S. CLARITY Act is encountering significant legislative obstacles as it moves from committee to the full Senate. Despite passing the Senate Banking Committee with a bipartisan vote of 15–9, only about 20 legislative days remain before the August recess. The Senate must still complete bill integration, procedural votes, reconciliation with the House version, and submission to the President. Jefferies notes that this tight timeline is the primary factor behind the market's revised expectations for the bill's passage.
Market Probability Signal: Polymarket Shows Drop to 48%
Data from prediction market Polymarket confirms growing pessimism. According to the report, the probability of the CLARITY Act passing by the end of 2026 has fallen from 70% in mid-May to 48%. This shift reflects the political reality that bipartisan consensus at the committee level does not guarantee smooth passage on the Senate floor. Jefferies warns that further declines in probability could trigger short-term crypto market volatility, particularly for assets sensitive to regulatory sentiment.
Structural Impact of Passage vs. Delay on the Crypto Industry
The report outlines two scenarios. If the CLARITY Act passes, it would establish a clear federal regulatory framework for digital assets, encouraging banks, asset managers, and exchanges to accelerate tokenization, custody, staking, and lending services. It would also pave the way for more crypto ETFs and initial public offerings (IPOs) of crypto infrastructure firms. Conversely, a delay or failure would prolong regulatory uncertainty, deterring traditional financial institutions from expanding blockchain-related businesses and suppressing institutional capital inflow in the near term.
Impact on Key Stocks and the Long-Term Competitive Challenge for Stablecoins
Jefferies expects the legislative process to continue influencing the market performance of crypto-related equities such as Circle (CRCL), Coinbase (COIN), and Bullish (BLSH), as well as certain digital assets. However, the report emphasizes that from a long-term perspective, Circle's biggest challenge is not regulatory clarity but intensifying competition from banks, fintech companies, and payment giants. Even if the CLARITY Act passes, the stablecoin issuer will face an increasingly crowded market, and the law's implementation could accelerate traditional financial institutions' own stablecoin launches.
Overall, the next few weeks of Senate legislative action will be a key source of crypto market volatility. Jefferies advises investors to monitor procedural votes and the reconciliation window between the two chambers.