TD Cowen warns CLARITY Act timeline remains far from assured

The chances of the crypto market structure bill, or CLARITY Act, passing before the November midterm election have remained far from assured as major legislative hurdles continue, according to investment bank TD Cowen.

According to TD Cowen’s Washington Research Group, Senate Majority Leader John Thune is expected to begin the procedural process for the CLARITY Act during the week of July 13, potentially setting up a Senate floor vote either that week or during the week of July 20.

The investment bank’s managing director, Jaret Seiberg, said the legislation still faces several obstacles before it can clear the Senate. 

He identified July 24 as the key deadline before the House leaves for its August recess and questioned whether the bill could realistically advance later in the year if lawmakers fail to act before then.

“We continue to question if the bill can pass in the fall before the election,” Seiberg wrote.

The assessment follows similar concerns raised last week by Galaxy Research, which reduced its estimate of the CLARITY Act becoming law in 2026 to 50% from 60%, citing Senate scheduling constraints and limited legislative time.

Earlier this month, JPMorgan analysts also said they see less than a 50% chance of the bill passing this year because of the approaching midterm election, unresolved policy disputes and the continuing debate over stablecoin yield.

Previous reporting by journalist Eleanor Terrett also said congressional staff, White House officials and crypto industry representatives have continued negotiating the legislation while the Senate remains in recess, with ethics rules, anti-money-laundering provisions and digital asset market oversight among the unresolved issues.

Trump stance and ethics debate remain key obstacles

One area of uncertainty, according to TD Cowen, is whether President Donald Trump would ultimately sign the legislation.

Seiberg said Democrats are expected to force Republicans to vote on politically difficult amendments, and Republican lawmakers are unlikely to take those votes unless they believe Trump will approve the final bill.

According to the note, that confidence has weakened after Trump declined to sign a bipartisan housing bill negotiated by his own administration and later said he would not approve legislation until Congress passes the Safeguard American Voter Eligibility Act. Although Seiberg said Trump could still make an exception for the CLARITY Act, he warned the uncertainty could delay the bill.

Ethics provisions have also become another point of disagreement. According to TD Cowen, Democrats want to ban government officials and their families from owning crypto businesses, a proposal that would also apply to the president. Seiberg said Trump has not indicated a willingness to compromise, leaving Republicans in a position where they may have to reject a Democratic amendment.

“It is not clear to us the GOP has the votes,” Seiberg wrote, adding that Republican Senators Thom Tillis, Mitch McConnell, Bill Cassidy, John Cornyn, Susan Collins, and Lisa Murkowski could play an important role because several are moderates or are retiring.

Separately, TD Cowen said the White House has continued meeting with stakeholders over concerns from law enforcement agencies about whether software developers should be held responsible if tools they create are later used for money laundering or other illicit finance. Seiberg said resolving those concerns would improve the bill’s prospects.

The discussion follows a letter sent last week by several law enforcement groups to the White House arguing that Section 604 of the CLARITY Act, known as the Blockchain Regulatory Certainty Act, could weaken oversight by protecting non-custodial software developers and make investigations into illicit crypto activity more difficult.

However, Seiberg said he does not expect changes to the bill’s stablecoin yield provisions despite continued opposition from banks.