Galaxy Slashes CLARITY Act Odds to 10% as Senate Window Narrows

Regulatory Forecast Dims for CLARITY Act

Galaxy Digital has dramatically downgraded its projection for the Digital Asset Market Clarity (CLARITY) Act’s likelihood of becoming law in 2026, slashing the probability to just 10%. The major cryptocurrency investment firm’s revised estimate reflects mounting political obstacles and a dramatically compressed legislative timeline. According to Alex Thorn, Galaxy’s head of firmwide research, this latest pivot represents a stark reversal from the firm’s previous optimism regarding the landmark digital asset regulation bill.

A Shrinking Window Threatens Legislative Progress

The pessimistic forecast stems largely from temporal constraints that have become increasingly constraining. When the Senate reconvenes on September 14, lawmakers will have approximately two to three weeks remaining before the legislative session concludes. According to Thorn, unless an initial motion to proceed receives a vote immediately upon lawmakers’ return to Washington, the CLARITY Act would need to consume virtually the entire remaining working calendar to pass the Senate. This compressed timeline creates what appears to be an insurmountable obstacle for comprehensive legislation requiring multi-day debate and amendment consideration.

Galaxy’s latest assessment marks a steep decline from the firm’s previous evaluations. The investment firm had positioned the bill’s passage odds at 75% in mid-May, revised upward to 60% in early June, then adjusted to a range of 60% to 50% by late June. The continued downward trajectory reflects deteriorating conditions in Washington rather than changes to the legislation itself.

Multiple Policy Disputes Remain Unresolved

Beyond the calendar crunch, substantial disagreements persist among lawmakers over fundamental provisions. Galaxy identified three key sticking points: unresolved ethics rules governing government officials’ involvement in crypto ventures, protections for software developers, and controversial stablecoin yield provisions. The banking industry and most Democratic senators have leveled particular criticism at sections permitting cryptocurrency companies to offer yield on stablecoins without adhering to the regulatory requirements imposed on traditional financial institutions.

Despite these headwinds, the cryptocurrency sector has mobilized in support of the measure. In early June, more than 200 cryptocurrency companies and industry organizations formally urged the Senate to advance the legislation through a coordinated advocacy campaign, demonstrating substantial backing from within the ecosystem for regulatory clarity.

The CLARITY Act represents the first comprehensive attempt to establish a coherent federal regulatory framework for digital assets. It successfully navigated the Senate Banking Committee in May but has faced mounting opposition since. For XRP investors and the broader cryptocurrency community seeking transparent, predictable regulation, significantly diminished passage odds represent a major setback in the long struggle for clear federal oversight that could unlock institutional participation and confidence across digital asset markets.

Source: Galaxy Digital, via Cointelegraph. Not financial advice.