TD Cowen says the CLARITY Act faces shrinking odds of becoming law in 2026 amid political resistance.
Crypto News
The US crypto market structure bill known as the CLARITY Act faces reduced odds of becoming law this year, investment bank TD Cowen said in a May 26 research note. Jaret Seiberg, managing director at TD Cowen's Washington Research Group, wrote that the firm remains pessimistic that the legislation will pass in 2026.
The Senate Banking Committee advanced the CLARITY Act earlier in May despite opposition from Democrats and banking industry groups. Seiberg noted at the time that the committee vote moved the debate from committee to the full Senate floor, but did not signal a deal had been reached. He also flagged that unresolved conflict-of-interest provisions remained a major obstacle to broader support.
Conflict-of-Interest Provisions Stall Bipartisan Support
In his May 26 note, Seiberg said the political environment around the bill is deteriorating, making it harder for Democrats to support the legislation without additional safeguards attached. A key sticking point is the absence of conflict-of-interest provisions that Democrats say must be included before they can back any crypto market structure bill.
A New York Times investigation into the Commodity Futures Trading Commission (CFTC) has added to that resistance. The report alleged that experienced agency staff had been sidelined to make the CFTC more favorable toward crypto and prediction market interests. CFTC Chair Michael Selig told the Times the agency is focused on addressing major wrongdoing and is not favoring any industry. Seiberg noted the allegations remain unconfirmed but said the report has made the bill a harder vote for Democrats.
Seiberg said Republicans may also grow reluctant to bring the bill to a floor vote if doing so forces them to vote on conflict-of-interest amendments. That dynamic, he argued, could result in lawmakers on both sides choosing to wait rather than act, leaving the bill in limbo heading into the second half of 2026.
The firm said the viable window for passing the ClarityAct likely extends to the August congressional recess. Delays beyond that point could push final passage to 2027, with implementing rules potentially not taking effect until 2029. Seiberg has previously noted that the upcoming midterm election cycle leaves limited room for further delay on the legislation.
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