Galaxy Downgrades CLARITY Act Odds to 10% Amid Senate Calendar Crunch

Galaxy Research has downgraded its forecast for the CLARITY Act's chances of becoming law in 2026 to just 10%. The bill, which aims to provide a stable national framework for US crypto policy, faces significant obstacles in the Senate, including an unresolved government-ethics agreement and pressure from banks.

Galaxy's head of firmwide research, Alex Thorn, notes that the main challenges are compressed into a short Senate session, making it difficult to reach a compromise. A procedural vote is scheduled for September 15, but clearing this hurdle would only open debate, not complete passage.

The SEC could potentially provide some relief by granting exemptions, which would be faster and narrower than legislation, but also less durable. Thorn expects the SEC to move even if Congress does not, and has outlined two possible routes: a tailored route for certain public cryptoasset offerings (Reg Crypto) and an Innovation Exemption that would allow limited experiments with secondary trading of tokenized securities.

A failed 2026 vote would not stop trading or adoption in the US, but it could lead to policy advancing through separate agency decisions, court rulings, and limited safe harbors. This scenario would likely favor large institutions over startups and developers, who have less room for maneuver in an uncertain regulatory environment.