TD Cowen has sharply downgraded the odds that the CLARITY Act — the long‑awaited U.S. bill to set a market structure for crypto — will become law this year, citing higher political friction and fraught negotiations between banks and crypto firms. Jaret Seiberg, the investment bank’s managing director, now puts the chance of the Senate passing a bill that the House would approve at roughly one‑in‑three, a much more pessimistic outlook than earlier expectations.
Lawmakers are reportedly preparing to circulate a revised draft of the CLARITY Act as soon as this week. The bill aims to create a regulatory framework for digital assets, but one provision in particular has become a flashpoint: a broad ban on platforms offering yield “directly or indirectly” on stablecoins. That restriction has provoked strong pushback from major crypto companies and complicated talks with banking interests.
Crypto firms are coordinating a response. Coinbase’s global head of investment research said last week the industry is working on a counterproposal to the stablecoin language. From the platforms’ perspective, Seiberg notes, limiting stablecoin yield would “discourage investors from using stablecoins as a way to invest excess liquidity,” undermining a key use case that companies like Coinbase want to preserve.
Banks, by contrast, see a stablecoin yield cap as a win. Limiting returns reduces the appeal of stablecoins for everyday payments and savings, which banks argue protects core deposits and reduces competitive pressure on traditional financial institutions.
Stablecoin yield is only one of several thorny sticking points. Negotiators still need to resolve complex questions around decentralized finance (DeFi) safeguards, token classification, and rules for tokenizing real‑world assets (RWAs). Those issues cut across political and industrial fault lines and have kept lawmakers and industry groups in detailed—and difficult—bargaining.
Even lawmakers who once sounded confident are tempering expectations. Politico reported Senator Mark Warner lowered his estimate for passage to 50–60%, down from earlier forecasts near 80%. “The signs are not pointing to success,” Seiberg observed, summarizing the growing doubt on Capitol Hill.
Seiberg expects the most likely window for action to be in late July, when the threat of congressional recess could push senators toward compromise. He argued a path to enactment would require Congress to push through a compromise the industry and banks both dislike — possible, he said, but unlikely given how rarely Congress takes that route.
A key milestone to watch is the markup date for the Senate Banking Committee; it will indicate whether negotiators are ready to move the draft from informal talks to formal consideration. Until then, uncertainty remains over whether the bill’s language can be adjusted to satisfy both sides or whether the CLARITY Act will stall amid competing priorities.
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