TD Cowen: CLARITY Act Faces Partisan Hurdles, 2026 Passage Uncertain
TD Cowen's Washington Research Group downgraded odds of the CLARITY Act passing the Senate this year, citing partisan disagreements over presidential conflict-of-interest provisions. The bill cleared two committee votes but faces resistance on the full Senate floor from both Democrats and Republicans.
Key Takeaways
- 1## Committee Progress Masks Deeper Disputes The CLARITY Act advanced through the Senate Agriculture Committee and Senate Banking Committee, but TD Cowen managing director Jaret Seiberg warned Tuesday that committee passage does not signal broad bipartisan agreement.
- 2Seiberg noted that the Banking Committee's approval earlier this month came despite Democratic objections and bank industry concerns, describing the vote as a tactical shift rather than a resolution of underlying disagreements.
- 3## The Partisan Fault Line The central obstacle, Seiberg wrote, hinges on conflict-of-interest provisions in the bill.
- 4Democrats are hesitant to support the measure if it includes such provisions, while Republicans may become reluctant to advance it if doing so requires them to vote against Trump-related amendments.
- 5This dynamic has effectively created a bind: neither party has strong incentive to move the bill to a full Senate vote before year's end, making 2026 passage appear more likely than 2025 enactment.
Committee Progress Masks Deeper Disputes
The CLARITY Act advanced through the Senate Agriculture Committee and Senate Banking Committee, but TD Cowen managing director Jaret Seiberg warned Tuesday that committee passage does not signal broad bipartisan agreement. Seiberg noted that the Banking Committee's approval earlier this month came despite Democratic objections and bank industry concerns, describing the vote as a tactical shift rather than a resolution of underlying disagreements.
The Partisan Fault Line
The central obstacle, Seiberg wrote, hinges on conflict-of-interest provisions in the bill. Democrats are hesitant to support the measure if it includes such provisions, while Republicans may become reluctant to advance it if doing so requires them to vote against Trump-related amendments. This dynamic has effectively created a bind: neither party has strong incentive to move the bill to a full Senate vote before year's end, making 2026 passage appear more likely than 2025 enactment.
Path Forward Remains Unclear
Seiberg's team remains pessimistic that legislative momentum will overcome the political calculus in time for a floor vote this calendar year. The Washington Research Group did not outline a scenario in which both parties agree to strip or modify the contested provisions, suggesting the bill may stall until after the new Congress convenes.
Why It Matters
For Traders
Regulatory uncertainty around stablecoin and digital asset oversight persists longer, keeping compliance-sensitive assets subject to ongoing headline risk.
For Investors
Delayed CLARITY Act passage means U.S. crypto regulation remains fragmented across multiple agencies; clarity on stablecoin treatment and reserve requirements will not materialize until at least 2026.
For Builders
Infrastructure and stablecoin projects cannot rely on a unified federal framework for the remainder of 2025, requiring continued navigation of state-by-state and agency-by-agency oversight.
