Managing director Jaret Seiberg, who leads TD Cowen's Washington Research Group, said the firm "remains pessimistic that the legislation will pass in 2026." TD Cowen's analysis indicated that if the Senate does not hold a floor vote before the August congressional recess, final passage would likely slip to 2027, with enforceable regulations potentially not taking effect until 2029.

The bill in question, formally titled the Digital Asset Market Clarity Act (H.R. 3633) and commonly called the CLARITY Act, was introduced by House Financial Services Committee Chairman French Hill in May 2025. It is designed to resolve a long-running dispute between two US regulators: the Securities and Exchange Commission and the Commodity Futures Trading Commission. Under the bill's framework, the CFTC would gain exclusive authority over spot markets for "digital commodities," a category covering tokens whose value is tied to the actual use of their underlying blockchain. The SEC would retain oversight of investment contract assets, meaning tokens that qualify as securities under existing legal tests. Stablecoins (crypto tokens pegged to a fiat currency like the dollar) would fall under a shared oversight structure. The bill also includes partial exemptions for decentralized finance protocols, though those provisions remain contested. Among the most disputed elements is whether anti-money-laundering compliance requirements should apply to non-custodial software.

The bill cleared the House of Representatives in July 2025 and passed the Senate Banking Committee 15 to 9 on May 14, 2026. It is now listed on the Senate Legislative Calendar, making it eligible for a full floor vote. The problem is time. The Senate has roughly eight weeks before it breaks for recess in August, and the CLARITY Act could consume up to a full week of floor debate on its own. Competing priorities include the Farm Bill, the National Defense Authorization Act, immigration funding legislation, a war-powers resolution on Iran, and a FISA surveillance law extension.

Three political fault lines have deepened in recent weeks. First, Democrats are pushing for a provision that would bar the president, the vice president, and members of Congress from personally trading or holding crypto assets while in office. Republicans are reluctant to hold a vote that forces them onto the record on that amendment. Negotiators are exploring a partial compromise that would include a runway period allowing current holders to divest, but no agreement has been reached. Second, a New York Times investigation into allegations that experienced CFTC staff were sidelined to benefit crypto interests has made it politically difficult for Democrats to support legislation that would expand the CFTC's authority. Third, major banks including JPMorgan are pushing back against provisions that would allow stablecoin issuers to pay yield to holders, arguing the structure resembles an unregulated deposit account.

TD Cowen analysts also noted that Democrats may see little incentive to hand Republicans a legislative win in an election year, particularly if they believe they have a realistic chance of recapturing the House in November. Prediction market platform Kalshi currently prices the probability of CLARITY Act passage below 50%.

Senator Cynthia Lummis of Wyoming, one of the bill's most prominent Senate supporters, offered a contrasting view. "We are closer to a functioning digital asset market structure than we have ever been," she said in a statement reported by CoinDesk. "Now is not the time to flinch."

For crypto users and developers outside the United States, the delay carries real practical consequences. Sub-Saharan Africa is among the world's fastest-growing crypto markets, recording more than 205 billion dollars in on-chain transaction value between July 2024 and June 2025, a 52 percent increase year over year, according to data from TRM Labs. Activity in the region is driven by dollar-pegged stablecoins used as inflation hedges, remittance flows, DeFi access, and peer-to-peer trading.

US regulatory ambiguity affects this region because exchanges operating in or seeking access to US markets remain cautious about which tokens they list and which products they offer to non-US users. South Africa compounded the complexity when its government announced, during the February 2026 Budget Speech, a set of draft Capital Flow Management regulations that would bring crypto assets under the country's exchange control regime for the first time. Those regulations were formally published in April 2026, creating a dual layer of uncertainty for South African businesses pursuing US partnerships.

In South Asia, regulatory development is advancing at different speeds. India has been actively enforcing against unlicensed crypto activity without yet having a formal domestic framework in place, while Pakistan took the opposite approach and established dedicated government crypto agencies in 2025 and 2026 as part of a deliberate effort to build out a licensing regime. Both countries have been calibrating their frameworks in part against international standards, and a clear US benchmark would give those regulators a usable reference point. It is worth noting that the United States provided some foundational clarity in 2025 when Congress passed the GENIUS Act, which established a regulatory framework for stablecoins. The broader question of digital asset market structure as a whole, which the CLARITY Act is designed to address, remains unresolved. Without that clarity, some developer activity has already migrated toward jurisdictions with enacted frameworks, including Singapore, the UAE, and the European Union under its Markets in Crypto-Assets regulation. Continued delay extends that pressure.

The August recess now represents the most concrete deadline to watch. If a bipartisan floor agreement is not reached before Congress breaks, the bill enters a post-midterm environment with an uncertain Senate composition and a compressed legislative calendar. TD Cowen's analysis specifically associates its scenario in which final passage slips to 2027 with enforceable market structure rules potentially not taking effect until 2029, leaving exchanges, token issuers, and developers worldwide in the same legal grey zone for years to come.