Wall Street policy research group TD Cowen now puts the odds of the Digital Asset Market Clarity Act clearing both chambers of Congress at roughly one in three, a significant downgrade from the firm's earlier forecasts.

Managing Director Jaret Seiberg, who leads TD Cowen's Washington Research Group, issued the revised estimate around May 26, 2026, citing a worsening political environment driven primarily by a standoff over ethics provisions targeting senior government officials with crypto holdings.

The Numbers That Matter

The bill, formally H.R.3633, passed the House 294 to 134 on July 17, 2025, and cleared the Senate Banking Committee 15 to 9 on May 14, 2026.

That committee vote carried bipartisan support, with Democrats Ruben Gallego of Arizona and Angela Alsobrooks of Maryland joining Republicans on the 15-to-9 tally. Only two Democrats crossed over, leaving the coalition characterised by analysts as still fragile.

But a Senate floor vote requires 60 votes to overcome a filibuster, meaning Republicans need somewhere between seven and nine Democrats to cross the aisle even if their own caucus holds together. That math has not improved since the committee vote.

Senator Mark Warner of Virginia, previously among the bill's more optimistic supporters, has reportedly revised his own probability estimate from around 80 percent down to 50 to 60 percent. The shift in sentiment since the May 14 committee vote has been rapid.

The Ethics Standoff

The central obstacle is a Democratic demand for language prohibiting senior government officials and their family members from owning or promoting crypto businesses. The relevance is direct: President Trump's crypto holdings are estimated at approximately $620 million, according to financial media reports.

Senator Chris Van Hollen has pushed amendments that would bar the president and other senior officials from owning, promoting, or affiliating with digital asset businesses.

The White House has drawn an equally firm line. The administration has indicated it will not accept any bill that targets the president, creating a standoff that legislative staff, however technically prepared, cannot resolve on their own.

Senator Elizabeth Warren, ranking Democrat on the Senate Banking Committee, made her position clear after the committee vote: "The deal you like, it's not the deal I like."

Seiberg acknowledged that a deal remains possible. "Election outcomes are always uncertain, which is why Democrats may cut a deal," he said. "That could happen quickly, as staff have been working on the technical language for months." But he also warned that without a resolution before August 2026, when midterm election campaigning effectively shuts down the Senate's calendar for contested votes, the bill could slip to 2027. Full regulatory implementation, under that scenario, could extend to 2029.

What the Bill Would Do

The CLARITY Act is the broadest U.S. digital asset legislation attempted to date.

It would give the Commodity Futures Trading Commission (CFTC) exclusive jurisdiction over spot markets for assets classified as digital commodities, preserve Securities and Exchange Commission (SEC) authority over investment contract assets, and establish rules for token classification, decentralised finance safeguards, tokenisation of real-world assets, and stablecoin reserve requirements.

A contested provision would also ban platforms from offering yield, directly or indirectly, on stablecoins. Both Coinbase and banking industry groups have objected to that language. The prohibition carries particular weight for East African platforms, which rely on dollar-pegged stablecoins for cross-border remittance flows. Any restriction on yield-bearing stablecoins under U.S. law could reshape the economics of those corridors regardless of whether the platforms themselves are U.S.-regulated.

Two Senate committee versions, one from Banking and one from Agriculture (advanced January 29, 2026), must be merged before a floor vote is even possible. That merged text would then need reconciliation with the House version, adding further time pressure against the August deadline.

Market Reaction and What It Means Outside the U.S.

Markets have begun pricing in the uncertainty. Bitcoin was trading around $77,352 on May 25, down 2.7 percent over seven days, with roughly $917 million in crypto futures liquidated in a single 24-hour period. Citigroup has cut its 12-month price targets for both Bitcoin and Ethereum, citing the legislative delay as a contributing factor.

For builders and users outside the United States, the practical signal is clear: do not wait for Washington. Africa's on-chain value reached $205 billion in 2025, with adoption up 52 percent year-on-year.

Nigeria, Kenya, South Africa, and Mauritius have all moved to establish formal digital asset frameworks in the past 12 months.

Kenya's Virtual Asset Service Providers Act became law in October 2025.

South Africa published draft capital flow management rules covering crypto in April 2026, bringing digital assets under exchange control regulations and replacing a framework that dated from 1961.

Nigeria enacted the Investments and Securities Act 2025, formally recognising digital assets as securities under oversight of the Nigerian Securities and Exchange Commission.

These jurisdictions are building regulatory infrastructure now, not in 2027.

India, which has a 30 percent flat tax on digital asset gains and expanding anti-money laundering oversight, has been watching U.S. developments closely for a legislative template. A prolonged U.S. delay removes that reference point and reduces short-term pressure on Indian policymakers to accelerate their own framework. Roughly 70 percent of global jurisdictions now operate under formal digital asset frameworks, according to the LW Crypto Policy Tracker, making India's continuing regulatory ambiguity increasingly an outlier rather than a norm.

What Comes Next

The bill's fate will likely be decided before the August 2026 deadline.

If Democratic and Republican negotiators cannot reach agreement on the ethics provisions before August 2026, when midterm campaigning effectively closes the Senate's calendar for contentious votes, the CLARITY Act joins a long list of U.S. financial legislation that stalled in election-year gridlock.

A 2027 restart would mean the current Congress passes no comprehensive crypto market structure law, leaving the CFTC and SEC jurisdictional split unresolved and enforcement-by-ambiguity as the default condition for any protocol seeking U.S. market access.

TD Cowen, which as recently as early 2026 described the regulatory environment as a golden age of deregulation for crypto, now treats 2026 passage as the exception rather than the expectation. That earlier optimism was grounded in concrete events, including the Office of the Comptroller of the Currency granting national trust charters to Circle, Ripple, and Paxos in December 2025. The reversal in that assessment, within months, reflects how quickly the political environment around digital assets has shifted.