Galaxy Research Cuts Odds of CLARITY Act to 10% This Year
Galaxy Research warns the Digital Asset Market Clarity Act (H.R. 3633) faces slim odds this year. The firm cut the CLARITY Act passing probability from 50% to 10% in about two months, citing a packed Senate calendar and unresolved stablecoin policy disputes.
Its probability track fell sharply after key legislative milestones. It peaked at 75% after the Senate Banking Committee markup on May 22, 2026, then declined to 60% in early June and 50% by late June. After a combined legislative text was released on July 24, the estimate dropped to 30%, followed by the steepest single fall from 30% to 10% in mid-August.
The core timing issue: the Senate returns from August recess on September 14, leaving only an estimated two to three weeks of usable floor time before the legislative calendar effectively closes.
Even beyond time, Galaxy Research highlights two sticking points blocking agreement across party lines. First is an ethics clause on how current and former officials may hold or trade crypto. Second is whether stablecoins can offer yield to holders, a debate overlapping a separate stablecoin-focused bill.
Over 200 firms backed the legislation via the Stand With Crypto coalition, and Senator Cynthia Lummis continues to push for passage. Traders should watch the stablecoin angle closely because if the CLARITY Act fails this session, it would likely be reintroduced next Congress, restarting a committee process that already took about a year.
Bearish
Galaxy Research’s downgrade to a 10% chance of the CLARITY Act passing this session is a negative signal for crypto regulatory clarity—especially for stablecoins, which are a market-wide liquidity and trading backbone. When lawmakers appear less likely to advance comprehensive rules (here, H.R. 3633 that determines whether assets fall under CFTC vs. SEC), traders typically price in more regulatory uncertainty, which can reduce risk appetite.
In the short term, the stablecoin yield dispute is likely to keep markets on edge. Stablecoin-related legislation moving in parallel increases the odds of headline-driven volatility: investors may rotate away from assets perceived as more policy-sensitive until Congress shows progress. This is similar to past cycles where delayed or stalled US crypto bills led to choppy trading and faster reaction to regulatory news.
In the long term, a 10% probability implies “delay risk” rather than “dead risk.” If the bill is reintroduced next Congress, the process could still culminate in clearer market structure, which is supportive over time. But the path likely involves repeated negotiations, extending the period of uncertainty—usually bearish for speculative positioning and bullish only after concrete legislative momentum or committee breakthroughs.
Net: bearish for near-term sentiment and stablecoin yield expectations; neutral-to-slightly bearish over the medium horizon until clearer signals emerge on stablecoin provisions and agency jurisdiction.