Galaxy Research has cut its estimate of the CLARITY Act becoming law in 2026 to roughly 50%, warning that the landmark crypto market-structure bill faces mounting procedural and political pressure despite strong industry support.
The downgrade reflects growing concern that Congress may be running out of usable legislative time before the 2026 midterm election cycle overtakes the agenda. Galaxy had previously lowered its passage odds to 60% from 75% in early June, citing the Senate calendar as the main constraint. Its latest assessment moves the probability closer to a coin flip, with the firm arguing that the bill must still clear several sequential hurdles under severe time pressure.
The CLARITY Act, formally known as the Digital Asset Market Clarity Act, is intended to establish a federal framework for digital assets by defining when tokens fall under securities or commodities rules, clarifying the roles of the Securities and Exchange Commission and Commodity Futures Trading Commission, and setting registration and disclosure requirements for crypto intermediaries.
The bill passed the House in July 2025 by a 294-134 vote, including support from 78 Democrats, and has since been the subject of intensive Senate negotiations. Galaxy noted that the Senate Banking Committee’s version remains tied up in unresolved discussions over stablecoin yield language, decentralized finance provisions, ethics rules and protections for non-custodial software developers.
Senate Calendar Becomes the Main Obstacle
Galaxy’s latest analysis suggests the biggest risk is no longer the broad policy direction of the bill, but the limited number of legislative days remaining. The firm said the CLARITY Act still needs to pass the Senate with 60 votes, be reconciled with the Senate Agriculture Committee’s digital commodity legislation, be reconciled again with the House-passed version and then be sent to the president.
That process would require floor time at a point when the Senate is already managing competing priorities, including national security, appropriations, nominations and election-year politics. Galaxy said any delay past the summer would make enactment significantly harder because little major legislation typically advances in the fall of a midterm year.
The firm also warned that Senate leadership may hesitate to allocate floor time unless negotiators can demonstrate that the bill has enough Democratic support to reach the 60-vote threshold. That makes unresolved ethics and illicit-finance provisions especially important, because Democrats have signaled that those issues could affect their willingness to support final passage.
Crypto Industry Faces Policy Uncertainty
The downgrade matters because the CLARITY Act is widely viewed as the most important U.S. crypto market-structure bill in years. Without it, much of the industry would continue to rely on agency guidance, court decisions and administrative policy rather than a durable statute.
For exchanges, custodians, token issuers and DeFi developers, the bill could determine how digital assets are classified, where platforms register and what compliance obligations apply. It could also shape the long-term balance of power between the SEC and CFTC, a central question for institutional adoption.
Galaxy said the bill remains strong on policy grounds and continues to have bipartisan foundations. However, the firm’s 50% estimate reflects the reality that support alone may not be enough if procedural timing, committee reconciliation and floor politics do not align quickly.
The market impact is significant. A successful CLARITY Act would likely be viewed as positive for U.S. crypto firms by reducing legal uncertainty and encouraging capital formation. Failure or delay could keep the sector dependent on reversible regulatory actions, making the policy environment vulnerable to future administrative changes. For investors, Galaxy’s downgrade signals that crypto regulatory clarity remains possible in 2026, but no longer looks like a high-probability outcome.
