Analytical firm Galaxy Research has lowered its estimate of the probability of the CLARITY Act, aimed at regulating the structure of the cryptocurrency market in the United States, being passed by 2026 to 10 percent.
A report published by Galaxy Research states that there were earlier expectations that the bill, advancing with bipartisan support in the Senate Banking Committee, could be passed by the Senate before the August recess, but political disagreements and industry lobbying have slowed this process.
According to the research firm, one of the main obstacles to passing the bill has been the lack of consensus regarding ethical standards for the activities of public officials in the cryptocurrency sector. Additionally, it is reported that pressure from local banks, in particular, has weakened support among some Republican senators.
It was noted that demands for additional restrictions on provisions of the Blockchain Regulation Act, which includes protections for cryptocurrency developers, have also complicated negotiations.
Analytical firm Galaxy Research reported that Senate Majority Leader John Thune was unable to secure the necessary 60 votes to pass the bill with cloture and therefore did not bring it to a vote before the August recess. The bill is planned to be presented to the Senate after work resumes in September.
However, according to Galaxy, the Senate session, which begins on September 14th, will conclude in early October due to the election campaign, leaving extremely tight deadlines for passing the bill.
In its assessment, the company stated: "CLARITY is now paying less attention to policy content and more to political balance."
Thus, Galaxy Research has lowered the probability of the CLARITY Act being passed in 2026 to 10 percent.
SEC and CFTC May Accelerate Regulatory Procedures.
The difficulties faced by the Clarity Act in Congress are prompting US regulators to accelerate their efforts to create new rules for the cryptocurrency market through administrative means.
According to Galaxy Research data, the US Securities and Exchange Commission (SEC) is preparing to enact two important regulatory exemptions that have been under consideration for some time.
Reg Crypto aims to create a new regulatory mechanism for the initial public offering of crypto-assets. The Innovation Exemption, on the other hand, aims to create a regulatory framework that would allow trading of tokenized securities on the secondary market within decentralized finance protocols.
However, Galaxy noted that the SEC has backed away from both rules several times under pressure from the traditional financial sector.
In the company's view, the SEC's recent resumption of considering these rules may indicate that the agency believes the CLARITY Act's chances of being passed by Congress have significantly decreased.
Galaxy Research also stated that Reg Crypto regulation is closely related to Section 1 of the CLARITY Act, and that Innovation Exemption regulation directly intersects with Section 10505 of this bill.
Galaxy Research analysts noted that regulatory exemptions, clarifications, and new rules that may be enacted by the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) could temporarily fill the legislative gap in Congress.
However, the company noted that such regulatory measures do not provide the same long-term legal protection as a law passed by Congress.
It was emphasized that another administration coming to power in the future could alter or completely repeal these rules.
Thus, in Galaxy's opinion, while regulatory measures may provide greater clarity in the short term regarding the issuance, trading, and market oversight of crypto-assets, they cannot replace a long-term market structure law that would be passed by Congress.
On the other hand, Galaxy Research stated that even if the CLARITY Act is not passed, the SEC expects to publish the text of the Crypto Regulation, the Innovation Exemption, or both in the coming weeks or months.
*This is not investment advice.
