Clarity Act Passage Chances Plummet to 25% After Summer Recess Delay

Investment bank TD Securities has expressed skepticism about the passage of the Crypto Clarity Act, citing last week's delay and potential stalling from Democrats. The bank now gives the bill a slim 25% chance of getting passed in September, down from previous expectations.

The Clarity Act, which aims to establish a federal rulebook for U.S. cryptocurrency markets, was initially expected to pass before the summer recess but has been delayed until lawmakers return from August recess. The latest draft of the bill contains language banning government officials from promoting or making money from crypto and has garnered support from major financial institutions like Goldman Sachs and Fidelity.

TD Cowen, however, believes that the path forward for the Clarity Act is harder than ever, assigning a 75% probability that it fails to become law this fall. One possible outcome, according to the bank, is for cloture to pass initially in September but then for Republicans to block Democratic amendments on the ethics and AML sections, leading Democrats to sink the second cloture vote.