According to a report by investment bank Jefferies, as cited by CoinDesk, the U.S. CLARITY Act still faces significant legislative obstacles in the Senate, and progress on the bill in the coming weeks could heighten crypto market volatility. The legislation aims to establish a clear federal regulatory framework for digital assets, but the window before Congress's August recess is narrowing.
Legislative Timeline and Market Probability Shift
Jefferies noted that although the CLARITY Act previously passed the Senate Banking Committee by a bipartisan vote of 15 to 9, only about 20 legislative days remain before the August recess. The Senate still needs to integrate the bill, hold procedural votes, reconcile with the House version, and submit it to the President for signature — a timeline that Jefferies describes as extremely tight. Data from Polymarket shows that the probability of the bill passing by the end of 2026 has dropped from 70% in mid-May to 48%, reflecting growing pessimism among market participants.
Impact on Institutional Operations and Crypto Stocks
Jefferies believes that if the act passes smoothly, it would quickly accelerate banks, asset managers, and exchanges in deploying tokenized assets, custody, staking, and lending services. It would also pave the way for more crypto ETFs and IPOs of crypto infrastructure firms. Conversely, if the legislation is delayed, regulatory uncertainty persists, causing traditional institutions to slow down blockchain initiatives. The report expects the legislative process to continue affecting crypto-concept stocks such as Circle (CRCL), Coinbase (COIN), and Bullish (BLSH), as well as certain crypto assets. These companies benefit directly from regulatory clarity but also face volatility risk from policy reversals.
Stablecoin Competition: Circle's Long-Term Challenge
Jefferies also pointed out that, in the long run, the greater challenge for stablecoin issuer Circle is competition from banks, fintechs, and payment companies, rather than regulatory changes alone. Circle's USDC is the second-largest dollar-pegged stablecoin, but as traditional financial institutions and large tech firms enter the stablecoin space, market share battles will intensify. Moreover, a clearer U.S. regulatory framework could further stimulate competition, requiring Circle to continuously enhance compliance and product differentiation.