The cryptocurrency industry's attempt to reshape the market structure currently has little chance of success, according to an August 10 analytical note provided to Bitcoin.com News by Jaret Seiberg, an analyst at TD Cowen's Washington Research Group. The firm assesses the probability of the CLARITY Act becoming law at 25% — just days after Senate Majority Leader John Thune (R-S.D.) filed a cloture motion on August 8 to advance the bill. The bill was approved by the Senate Banking Committee on May 14 in a bipartisan vote of 15-9.
Seiberg wrote:
"We estimate a 75% chance that CLARITY does not become law this fall."
At the center of the policy debate is how the CLARITY Act would allocate federal oversight of digital assets between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Digital commodities would fall under the CFTC's jurisdiction, while assets related to investment contracts would remain under SEC supervision.
He added:
"The bill is not dead, but the path to passage becomes more difficult."
In the first of three failure scenarios, the Senate in September passes an initial cloture vote, but the legislative process subsequently stalls. Democrats insist on amendments addressing ethics and Bank Secrecy Act provisions, Republicans refuse to bring those amendments to a vote, and then Democrats block a cloture motion. Seiberg believes such a sequence would effectively kill the bill.
Debates Over Ethics and Anti-Money Laundering Could Determine Next Vote's Outcome
Senators have been divided for months over ethics, illicit finance, and Bank Secrecy Act anti-money laundering requirements — issues that could determine the outcome of the amendment fight described by Seiberg. An updated CLARITY text released on July 22 by U.S. Senator Cynthia Lummis (R-Wyo.) reflects the merged work of the Senate banking and agriculture committees, according to Lummis' office.
The legislative impasse extends well beyond the House vote. The CLARITY Act remains unresolved more than a year after its House passage, leaving the Senate's approach to registration and disclosure rules for exchanges, brokers, and custodians unsettled.
The Senate May Not Hold the Initial Cloture Vote at All
A second scenario proposed by TD Cowen suggests the scheduled Senate vote might not happen at all. Republicans may prefer to avoid floor debates regarding President Donald Trump's crypto assets and objections from major law enforcement agencies, Seiberg wrote.
The note states:
"The fact that Majority Leader John Thune filed cloture on the CLARITY bill does not guarantee the vote will occur."
Before leaving Washington, senators agreed that a floor vote would take place on September 15 at 2:15 p.m. ET, reducing the likelihood of this scenario but not eliminating it entirely.
Prediction markets have also lowered expectations for the bill's passage. As of August 9, traders assessed the probability of the CLARITY Act becoming law by 2026 at 21%, roughly aligning with TD Cowen's assessment.
Initial Cloture Vote Could Pass Without Follow-Up Votes
The third failure scenario envisions an initial procedural victory followed by legislative paralysis. Thune secures an initial cloture vote for the crypto sector, but nothing follows: debate is limited, amendment votes are not held, and additional cloture motions are not filed. The bill avoids a second decisive defeat but effectively stops advancing — an outcome that Bitwise Chief Investment Officer Matt Hougan characterized as a state of "walking dead," while regulators proceed with parallel crypto rules.
Stablecoin yield remains another unresolved policy dispute that could complicate negotiations. Stablecoins are cryptocurrencies designed to maintain relatively stable value through backing by fiat currency or other mechanisms, and whether digital asset service providers can pay holders yield has divided senators and banking lobbyists. Major stablecoins differ in structure, application, and risks, although they share the common goal of maintaining relatively stable value.
What Must Happen for the Bill to Pass
TD Cowen's 25% probability passage scenario outlines three possible paths, with the most likely requiring Democrats to get a vote on an ethics amendment and lose it. The analyst wrote: "We assess a 25% chance that CLARITY becomes law."
Under this scenario, the initial cloture motion receives 60 votes, Democrats offer their bipartisan ethics compromise as an amendment, Republicans reject it with a simple majority vote, and crypto-loyal Democrats support the bill after having registered their support for the defeated amendment. A less likely variant involves President Trump reaching his own deal with Democrats on ethics, freeing enough votes for cloture.
Seiberg concluded:
"We believe the bill could pass during a lame-duck session if Republicans retain control of the House and Senate. We view this as unlikely, though not impossible."
Such a scenario would delay the law's enactment until the fall and depend on Republicans maintaining control of both chambers. Lawmakers return on September 14, and Republicans, with 53 seats, would need at least seven Democratic or independent votes to invoke cloture on September 15, assuming all Republicans vote 'yes.'
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