Galaxy and the Lower Chances of CLARITY Act Passage: Time is Running Out, Questions Remain Unanswered

Galaxy and the Lower Chances of CLARITY Act Passage: Time is Running Out, Questions Remain Unanswered

There are growing concerns in the crypto world that the much-anticipated CLARITY Act, which is intended to regulate the digital asset market structure, may not be passed in time. Galaxy Digital, a leading name in crypto finance, has now estimated that the key legislative step will pass the Senate by the end of the year at just 60%. This is a significant drop from previous estimates and indicates increasing uncertainty about the legislative process.

Why is it so important? The CLARITY Act is considered one of the most significant legislative initiatives to help define the rules and regulations for cryptocurrencies in the US. It should not only make it easier to do business in the digital asset sector, but also increase investor confidence and attract new capital flows. However, time is running out for its passage, and the legislative process is at risk due to the Senate’s busy calendar ahead of the elections.

“On May 22, we raised our estimate of the probability that the CLARITY Act will take effect in 2026 to 75%, up from 55% in early May,” Galaxy analyst Alex Thorn said in a note. Now, however, he’s lowered that estimate to 60%, signaling that the chances of its passage are diminishing.

The main problem is the time pressure. According to Thorn, the bill must pass the Senate by the end of July at the latest, when the month-long recess begins before the election. After that, legislative negotiations are almost certain to freeze or become significantly more complicated. Historically, during the pre-election period in Congress, the approval of key laws slows down, so it is likely that this bill will have to wait until better times.

Moreover, even if the Senate has already approved a version of the bill, it still needs to get at least 60 votes, which is necessary for approval without a long debate. Thorne said it is realistic that majority leaders will have to schedule a meeting in July to meet the deadline before the holidays. If the talks drag on, the chances of success are significantly reduced.

Another factor contributing to the uncertainty are the still unresolved issues of ethics and funding, which could affect the final vote. However, Galaxy Digital says that if the Senate leadership were to commit to passing the bill soon and all key provisions were finalized, their chances of success would increase.

Other analysts have similar views on the situation. For example, analysts at JPMorgan estimate that the probability of the CLARITY Act passing this year is less than 50%. Bitwise Chief Investment Officer Matt Hougan is even more skeptical, estimating the chances of passage this year at just 5 to 30%.

On the contrary, Senator Cynthia Lummis, one of the biggest advocates of cryptocurrency legislation, is actively calling for the accelerated passage of the bill. In her posts on social media, she emphasizes that the bill has already passed the committee and now it is the turn of the Senate. “We have not come this far to give up on it at five yards,” she recently declared.

The situation is so tense and uncertain. It remains to be seen whether Senate leaders will truly commit to passing the bill in the coming weeks, or whether the legislative process will stall again. In any case, the question remains what impact this will have on the cryptocurrency industry in the US and on the global stage, where legislation is still a key factor influencing market developments.

One thing is certain: time is against the passage of the CLARITY Act, and all stakeholders are now closely watching to see if all obstacles can be overcome before the start of the congressional recess.

*This is not an investment recommendation.

The Coingarage Team