The U.S. "CLARITY Act" is on the Senate legislative agenda: Bessent strongly pushes for passage this summer.

"The Digital Asset Market CLARITY Act" is a milestone federal regulatory legislation proposed during the U.S. legislative cycle of 2025 to 2026, typically associated with H.R. 3633. Its core goal is to establish a comprehensive federal regulatory framework for digital assets through legal means, ending the long-standing regulatory ambiguity and enforcement-driven model faced by the U.S. crypto market over the past decade.

The most fundamental institutional design of the bill is reflected in three levels. First, regarding the allocation of regulatory authority, the CLARITY Act explicitly grants oversight of spot trading of digital commodities to the CFTC, making it the primary regulator of the secondary digital commodity market, while the SEC continues to oversee primary market issuance of security tokens. This division resolves the jurisdictional disputes that have repeatedly arisen between the SEC and CFTC due to ambiguous boundaries.

Second, on asset classification, the bill systematically categorizes digital assets into "digital commodities," "subsidiary assets/investment contract assets," and licensed payment stablecoins. The most critical rule is: even if a token is initially classified as an investment contract at issuance, as long as its network is in fact sufficiently decentralized, it can be reclassified as a digital commodity under the conditions specified by the bill, breaking the previous classification deadlock.

Third, on the issue of stablecoin yields, after four months of bipartisan tug-of-war, the bill ultimately adopts a compromise: prohibiting static holdings from earning interest, while allowing incentives for business activities. In other words, platforms cannot pay users solely for holding assets, but incentives earned through real business activities such as payments, trading, or asset staking remain within the legal scope.

Additionally, the bill explicitly states that fully decentralized DeFi protocols may be exempt from SEC regulation; issuance activities of unregistered tokens within certain limits are permitted; and all regulated entities must strictly implement customer asset segregation and be incorporated into anti-money laundering and anti-fraud compliance systems. The bill also includes a clause to prevent the issuance of retail CBDCs without explicit congressional authorization.

Core Challenges in Advancing the Bill to the Full Senate

The progress of the CLARITY Bill has not been smooth. The House version passed in July 2025 with a bipartisan vote of 294 in favor and 134 against. In January 2026, the Senate Banking Committee’s scheduled review was delayed due to industry opposition and deadlocked bipartisan negotiations. After ongoing negotiations, the committee finally approved a revised version of the bill on May 14 with a vote of 15 to 9. The bill was officially scheduled for Senate floor consideration on June 1 and is now eligible for full Senate debate.

However, the real uncertainty lies in the full Senate vote. This step requires 60 votes to overcome lengthy debate. With Republicans holding 53 seats, supporters need to secure at least 7 Democratic votes.

The cost of these 7 votes centers on an ethics clause. Democratic Senator Gillibrand explicitly stated that she would not support the bill unless it included provisions prohibiting members of Congress and senior officials from profiting from insider information in the crypto industry. The White House remains cautious, considering the clauses related to the President’s crypto asset interests difficult to accept. This disagreement makes the 60-vote threshold highly uncertain.

Beyond the ethics clause, banking industry groups continue to pressure for stricter restrictions on stablecoin yield provisions, arguing that such products could directly compete with traditional deposits. Democratic staff also pointed out that the bill’s anti-money laundering provisions contain loopholes that could facilitate illegal finance, further complicating efforts to garner Democratic support.

Why Market Probabilities Drop Significantly After Committee Approval

The fluctuations in the probability of the bill passing in prediction markets reflect deep changes in market pricing logic.

As of June 4, 2026, the Polymarket platform shows a 59% probability that the bill will be signed into law in 2026, with total contract bets exceeding $1.2 million.

The timing of the probability decline is noteworthy. After the committee approved the revised bill on May 14, the market did not respond with a sustained increase—probability briefly touched above 70% before continuing to decline. This indicates that committee approval is no longer the core variable in market pricing; traders’ focus has shifted to the more complex full Senate battle.

Another important signal from the prediction market is that traders on the Kalshi platform attribute the sharp probability re-evaluation mainly to the crowded Senate schedule, unresolved stablecoin yield disputes, and ongoing resistance from the banking sector. These three dimensions correspond to the three major hurdles between “committee progress” and “full Senate approval”—a narrowing time window, unresolved clause disputes, and persistent interest group lobbying.

It’s important to note that different institutions’ assessments of passing probabilities vary significantly. Galaxy Research raised its estimate of the bill’s 2026 passage likelihood to about 75% after committee approval, while Washington-based research teams like TD Cowen remain more cautious. This divergence itself underscores a key fact: the final outcome of the CLARITY Bill depends not only on the legislative text but also on the game of multiple variables within a limited time window.

Why the Senate’s Time Window Is So Tight and Difficult to Extend

Bessent urged lawmakers at the June 3 Senate hearing to pass the CLARITY Bill this summer, citing two unavoidable political cycles.

First, the legislative agenda for the second half of Congress will shift to budget negotiations. Once in the appropriations process, the schedule for crypto market structure legislation will be significantly squeezed. Second, the November midterm elections will occupy lawmakers’ time and attention after the summer. If the bill does not complete Senate procedures in summer, the next feasible legislative window will be pushed to 2027. Senator Lummis issued a more severe warning: “Pass it now, or wait until 2030.”

From a technical timeline perspective, Galaxy Research’s Alex Thorn offers a relatively optimistic schedule: coordination of the two versions from the Banking and Agriculture Committees begins in June; full Senate debate occurs mid-June; full Senate vote is completed by late June; coordination between the House and Senate is finalized in July; and the bill is signed into law by early August. However, this timeline assumes all steps proceed smoothly, which is unlikely given the extensive negotiations at each stage.

Senators leading the process must complete coordination of the Banking and Agriculture Committee versions before full Senate voting. The White House previously set July 4 as a target for signing, but achieving this depends not only on legislative procedures but also on bipartisan compromises on ethics, stablecoin yields, and AML issues.

Is Summer Passage the Only Correct Market Pricing Baseline?

The fluctuations in prediction market probabilities essentially reflect a market re-pricing of the legislative window in summer. Over more than five months, the forecasted probability of the CLARITY Bill’s passage has experienced six turning points, each corresponding to key legislative events: January 2026 delay lowered the probability; bipartisan negotiations in February pushed it to a high of 82%; rejection by the banking industry in March caused a sharp decline; April’s drop to 40%; the release of a compromise text in May caused a rebound to 73%; and after committee voting, the probability continued to decline.

This rollercoaster reveals an important insight: the market is not simply pricing a binary “pass or fail,” but continuously updating expectations about “timing” and “conditions” for passage. The current roughly 50% probability does not mean the bill is unlikely; rather, it reflects the market’s view that the narrowing of the summer window exceeds most analysts’ prior expectations.

Given the current legislative realities, the compromise on stablecoin yield clauses in early May broke the deadlock, but unresolved ethics issues and ongoing banking opposition remain significant hurdles. JPMorgan’s analysis indicates negotiations are in the final sprint, with disputes reduced from a dozen to just a few. This situation’s probability range inherently implies substantial uncertainty about the bill’s final outcome.

How a Final Passage Would Reshape the Crypto Market Structure

If the CLARITY Bill ultimately becomes law, its impact will go far beyond mere regulatory rules. Its deepest significance lies in shifting the crypto spot market from an “enforcement-driven uncertain state” to an “institutionalized operation.”

For trading platforms, the bill provides a clear federal registration and compliance pathway. Platforms will no longer need to repeatedly justify their operations within the gray areas of SEC securities regulation, CFTC derivatives oversight, and state transfer laws. Regarding asset classification, the joint SEC and CFTC interpretive announcement in March 2026 officially designated Bitcoin, Ethereum, and 16 other tokens as digital commodities, granting investors holding such assets much higher regulatory certainty.

From a capital flow perspective, eliminating regulatory uncertainty will be a key prerequisite for institutional capital entering the digital asset market. Conservative institutions like pension funds and insurance companies have long stayed on the sidelines due to the lack of a clear legal framework. Once the CLARITY Bill is enacted, these institutions will gain a legally compliant participation path. JPMorgan’s forecast suggests that if the bill passes by mid-2026, institutional inflows could accelerate significantly in the second half of the year.

The bill also alters regulatory expectations for DeFi. Fully decentralized activities (such as software development, coding, node operation) will be granted a “safe harbor” from SEC regulation; however, teams providing front-end interfaces, charging fees, or engaging in marketing will be explicitly classified as regulated entities, required to comply with AML and anti-fraud obligations. This “substance over form” principle helps curb regulatory arbitrage under the guise of “pseudo-decentralization.”

In the stablecoin sector, the bill works in tandem with the 2025 GENIUS Act. Compliance costs will inevitably concentrate among leading firms, and the market structure is expected to undergo a significant structural reshaping after the bill’s enactment.

Summary

The CLARITY Bill has entered the Senate legislative schedule, with U.S. Treasury Secretary Bessent actively pushing for its passage this summer. The controversy over stablecoin yield provisions has been addressed through bipartisan compromise, but disagreements over ethics clauses and ongoing banking resistance leave the 60-vote threshold in the Senate highly uncertain. Market prediction signals indicate the legislative window is narrowing, with a 50% to 54% chance of passage. If enacted, the bill will clarify SEC and CFTC regulatory roles, facilitate institutional participation, and promote the institutionalization of DeFi and trading platforms. Short-term market reactions show profit-taking after news, but the structural impact of the bill requires longer-term assessment.

Frequently Asked Questions (FAQ)

Q1: What are the differences between the CLARITY Bill and the GENIUS Bill?

The GENIUS Bill, passed in July 2025, focuses on establishing a federal prudential regulatory framework for payment stablecoins, including 100% reserve requirements and AML compliance. The CLARITY Bill covers the entire digital asset ecosystem’s market structure, including asset classification, regulatory authority division, trading platform registration, DeFi exemptions, and more. Both complement each other, forming the pillars of U.S. digital asset regulation.

Q2: What legislative stage is the bill currently in?

The bill was officially scheduled for Senate floor consideration on June 1 and is eligible for full Senate debate. The next steps involve a Senate vote requiring 60 votes, then coordination with the Senate Agriculture Committee, final reconciliation with the House version, and finally signing by the President.

Q3: Why is the 60-vote threshold in the Senate so difficult to cross?

The Senate requires 60 votes to overcome filibuster. Republicans hold 53 seats, so at least 7 Democratic votes are needed. Democrats have explicitly linked support to the ethics clause (prohibiting insider trading by lawmakers), and the White House remains cautious about this clause. These political disagreements create significant uncertainty.

Q4: What is the final rule on stablecoin yields?

After bipartisan negotiations, the bill’s Section 404 adopts a compromise: banning exchanges from paying indirect static interest on holdings but allowing incentives derived from real business activities, such as payments, trading, or asset staking, in compliant scenarios.

Q5: What impact will the bill have on DeFi?

The bill adopts a dual approach: fully decentralized activities (software development, coding, node operation) may receive SEC exemption; but teams providing front-end interfaces, charging fees, or marketing will be classified as regulated entities, required to comply with AML and anti-fraud rules.

Q6: What is the probability of delay until 2027?

Kalshi data shows about a 50% chance of passing before 2027, with only 14% before July and 37% before August. Given the congressional focus on appropriations and the upcoming midterms, if the bill does not pass before August, the next feasible window shifts to 2027.

Q7: What is the potential impact on institutional capital?

JPMorgan forecasts that if the bill passes mid-2026, institutional inflows could accelerate significantly in the second half of the year. Pension funds, insurers, and other conservative investors will gain a legal compliance path, leading to structural growth in demand.