Bernstein warns the Senate has only days left before recess to pass the CLARITY Act, and that failure would jolt crypto markets. The brokerage still expects the SEC and CFTC to speed up crypto rulemaking under Project Crypto regardless of the bill's fate, while Republicans lack the seven Democratic votes needed to force a floor vote.
Bernstein analysts led by Gautam Chhugani told clients the Senate has only the coming week before recess to pass the CLARITY Act, calling it "the most consequential crypto market structure bill in U.S. history." Failure would trigger a negative reaction across digital asset markets, the analysts said, but it would not stop crypto policy from moving forward.
Seven Democratic votes stand between the bill and the floor
The House passed the underlying bill, H.R. 3633, by a vote of 294-134 in July 2025, and the Senate Banking Committee advanced its own version 15-9 in May 2026. Neither vote guarantees the 60 needed now: a cloture petition must be filed by Wednesday, August 5 to produce a Friday, August 7 vote on advancing the bill, the last realistic window before the Senate's August 10 recess.
Republicans hold 53 seats and need at least seven Democrats to reach that threshold. Seven Democratic negotiators — Catherine Cortez Masto, Angela Alsobrooks, Cory Booker, Ruben Gallego, John Hickenlooper, Mark Warner, and Raphael Warnock — said the Republican draft falls short on ethics, consumer protection, and national security provisions. Bipartisan Senators Thom Tillis and Ruben Gallego submitted a revised ethics compromise to the White House last week as talks continue.
Regulators would fill the gap without a law
Bernstein expects the SEC and CFTC to accelerate crypto rulemaking under Project Crypto if CLARITY fails, issuing clearer token taxonomy and DeFi rules without waiting on Congress. CFTC Chair Michael Selig warned last month that regulators would end up writing all the rules for crypto themselves if lawmakers fail to act, calling the current patchwork of state rules bad for business.
The brokerage also expects continued support for tokenization initiatives — tokenized real-world assets, perpetual futures tied to them, and prediction markets — even if the bill stalls.
Traders already doubt passage this year
Polymarket's odds on 2026 passage have fallen to roughly 30%, with about $3.7 million in trading volume behind that price. The bill's ETP grandfather clause would permanently exempt tokens that already anchor an exchange-traded product — Bitcoin, Ether, XRP, SOL, and Dogecoin — from securities treatment without requiring issuer action.
A missed window pushes the fight into September, when spending deadlines and midterm campaigning crowd the calendar.
Sources: The Block, CryptoSlate, crypto.news
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