The CLARITY Act faces a narrowing path through the Senate before its summer break. Bernstein analysts said another delay could trigger a fresh crypto sell-off. However, they expect the market to recover during late Q3 or early Q4.
The Digital Asset Market Clarity Act was missing from the Senate schedule for Monday, Aug. 3. Its absence left lawmakers with less time to start floor proceedings before the recess.
The schedule instead listed a 5:30 p.m. cloture vote on H.R. 6500. That measure is a vehicle for a continuing resolution. No action appeared for H.R. 3633, the CLARITY Act. Senate Majority Leader John Thune could still raise the proposal later this week.
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What Happens If the CLARITY Act Is Delayed?
The Senate’s state work period is set to begin on Aug. 10 and continue until Sept. 11. According to Bernstein, a failure will be followed by a prompt reaction from Bitcoin and other cryptos. Analysts referred to the potential action as a “knee-jerk” sell-off across the industry.
This reaction would likely generate another leg downwards for crypto prices. Bitcoin is under pressure amid investors’ doubts about the ability of Congress to complete its crypto agenda prior to the midterm elections.
Predictive traders seem less optimistic about the chances of adoption now. Polymarket estimates the probability of CLARITY Act adoption before Dec. 31, 2026, at just 27%.
The probability fell 10 percentage points last week, with a month-to-date decline being 12 points. Traders have staked $3.77 million on the result.
According to Bernstein, the delays might add to the pressure on the Securities and Exchange Commission and Commodity Futures Trading Commission.
Both regulators might come with additional clarifications within Project Crypto, a joint initiative of them that leverages existing regulatory authorities of both regulators until Congress passes permanent market rules.
Bernstein sees guidance regarding the classification of tokens and decentralized finance products. The regulators may accelerate a proposed exemptive relief for certain token offerings.
The agency guidance will be unable to provide the certainty that the act would do. It would regulate the digital assets’ issuance and trading. The CLARITY Act would assign SEC and CFTC the responsibilities.
Financial institutions are against some clauses of the legislation. They argue that the stablecoin clauses allow crypto platforms to provide rewards without banking obligations.
Senate Faces Tight Filing Window
Under Senate Rule XXII, 16 senators are required to sign the cloture petition. A petition filed on Wednesday, August 5, will result in the cloture vote on Friday, August 7, if the Chamber is in session.
That cloture vote will only be a move to stop debate on the motion to proceed, but it will not pass the CLARITY Act. On bills, cloture generally requires 60 votes, but it can even provide for additional time of up to 30 hours to consider it.
The motion to proceed will need approval from the senators. Then they will debate any amendments before voting for its final passage.
The rest of the days will determine what the fate of the bill will be in the near future. The bill might be passed this week, or it will be backlogged in September.
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