Galaxy Digital head of research Alex Thorn is taking a dim view of the CLARITY Act becoming law. He says there is only a 10% chance the bill will become law.
As it stands today, the Senate is scheduled to vote on or around September 15th, once members return from their summer recess. While many anticipated a vote before the recess earlier this month, the Senate failed to bring a bill to the floor because it could not secure enough Democrat backing to avoid a potential filibuster.
Thorn goes on to nail the reason for his diminishing hope the bill will be approved as it is:
“… now much more about politics than policy. The bill is extremely comprehensive and includes registration and licensing requirements, new compliance responsibilities for service providers and new surveillance and sanctions authorities for government, substantial clarifications of law and regulation to protect consumers, and myriad other provisions that promote American leadership, investor protection, and regulatory clarity. None of that matters right now.”
With the midterms approaching, when Democrats hope to capture the Senate, House, or all of Congress, they don’t want to give the White House or Congressional Republicans a win.
As outlined above, the CLARITY Act is good for the country and America’s economic prominence, but Democrats do not care about this. It is all about regaining legislative power.
Meanwhile, the Securities and Exchange Commission is moving on its own to provide greater regulatory clarity by updating rules to ensure consumer protections while enabling innovation, but as Thorn points out, a Democrat administration can turn around and undo all of this. And that is why legislation is preferred.
On a somewhat more optimistic note, Kalshi has the probability that the CLARITY Act is approved before October 1 at 41% 2027 (45% before January 1, 2028).
Polymarket is also a bit more positive than Thorn; this prediction market sees a 20% chance the bill will become law before the end of the year.
Approved or not, the bill will be voted on before the end of the year. It is important to get Senators from both parties on the record about whether they support innovation in financial services and investor protection, or simply offer lip service about what is good for the country.
