TD Cowen says crypto market structure bill passage 'far from assured' before midterm election

The passage of the crypto market structure bill, or Clarity Act, before the November midterm election is "far from assured," as major hurdles remain, according to investment bank TD Cowen.

The Senate is expected to begin considering the Clarity Act during the week of July 13, with Senate Majority Leader John Thune likely to begin the procedural process that could lead to a floor vote either that week or during the week of July 20, Jaret Seiberg, managing director at TD Cowen's Washington Research Group, said in a Monday note.

However, Seiberg said the bill still faces significant political and policy hurdles, with July 24 being the key deadline before the House leaves for its August recess. He questioned whether the bill could pass later in the year if lawmakers fail to approve it before then.

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

Clarity Act hurdles

One key issue is President Donald Trump's position. Seiberg said Democrats are expected to force Republicans to vote on politically difficult amendments, and Republicans will likely only take those votes if they are confident Trump will ultimately sign the bill.

According to Seiberg, Republicans have become less certain after Trump recently refused to sign a housing bill that had been negotiated by his own administration. Trump has also said he will not sign any legislation until Congress passes the Safeguard American Voter Eligibility (SAVE) Act on elections. Though the president could make an exception for the Clarity Act, Seiberg said the uncertainty means the bill could stall.

Another issue is ethics rules. Seiberg noted that Democrats want to prohibit government officials and their families from owning crypto businesses, a proposal that would also apply to the president. He said Trump has not indicated a willingness to compromise, meaning Republicans may have to vote down a Democratic ethics amendment.

"It is not clear to us the GOP has the votes," Seiberg wrote. "We are watching GOP Sens. Thom Tillis, Mitch McConnell, Bill Cassidy, John Cornyn, Susan Collins and Lisa Murkowski as they either are retiring or are moderates," suggesting their votes could prove important.

Law enforcement concerns also remain under discussion. Seiberg said the White House is trying to address those concerns through meetings focused on whether software developers should be held responsible if crypto tools they create are later used for money laundering or other illicit finance. Resolving that issue would improve the bill's chances, he said.

Last week, law enforcement groups sent a letter to the White House arguing that Section 604 of the Clarity Act, also known as the "Blockchain Regulatory Certainty Act" (BRCA), which offers protections to non-custodial tech developers, could create gaps in oversight and make it harder to investigate and prosecute illicit crypto activity.

Seiberg added that he does not expect any changes to the bill's stablecoin yield provisions, meaning banks are likely to continue opposing the legislation. "This tells us crypto interests believe the bill will pass despite bank objections," he said.

Seiberg has remained skeptical about the crypto bill's chances this year as hurdles remain. Last week, Galaxy Research cut its estimate of the odds that the Clarity Act will become law in 2026 to 50%, down from 60% earlier this month, citing timing and Senate calendar constraints. Earlier this month, JPMorgan analysts also said they see less than a 50% chance of the crypto bill passing this year as the midterm election approaches, the stablecoin yield debate continues, and other key hurdles remain.