Crypto Bill Odds Cut to 33% as TD Cowen Flags Senate Roadblocks

Momentum behind the CLARITY Act, the U.S.’s primary crypto market structure bill, is fading as unresolved policy disputes continue to divide lawmakers.

Summary:

TD Cowen cuts odds of CLARITY Act passage to 33%.
Multiple unresolved issues are slowing progress in the Senate.
Regulators are stepping in as lawmakers struggle to agree.

According to information from Galaxy,TD Cowen analyst Jaret Seiberg has lowered the probability of passage this year to just 33%, warning that the challenges go far beyond the widely discussed stablecoin yield debate.

TD Cowen Sees Deeper Structural Problems

Seiberg argues that the focus on stablecoin yields is misplaced. While the proposed compromise – banning interest but allowing activity-based rewards – has drawn attention, it has not resolved tensions between banks and crypto firms. TD Cowen describes the solution as insufficient, noting that neither side is satisfied.

More importantly, the firm highlights a set of less visible but more complex hurdles. These include conflicts over exchange structure, banking sector concerns about deposit outflows, and ongoing disagreements around regulatory jurisdiction.

Lawmakers remain divided on whether crypto platforms should combine trading, custody, and market-making functions. The current draft leans toward strict separation, a move that would force major firms to restructure. Industry opposition has been strong, adding pressure on negotiators.

At the same time, regional banks are lobbying against the bill. Even without yield, stablecoins are seen as a threat to deposits. TD Cowen notes that this concern has gained traction in the Senate, particularly among lawmakers focused on financial stability.

Regulatory Uncertainty Keeps Pressure on Congress

Jurisdiction remains another unresolved issue. The bill attempts to give the Commodity Futures Trading Commission primary authority over digital commodities, but the definition of a security is still unclear.

A proposed clause would allow the Securities and Exchange Commission to challenge classifications. This creates uncertainty for firms that were expecting clearer rules. Seiberg flags this as a key reason why the bill may fail to deliver the regulatory clarity it promises.

Debate over self-custody wallets is also slowing progress. Proposals to extend anti-money laundering requirements to unhosted wallets have triggered pushback, with critics arguing the measures are impractical and raise privacy concerns.

The balance between federal and state oversight adds another layer of complexity. The current framework has not satisfied either side, leaving negotiators without a clear path forward.

SEC Steps In as Timeline Narrows

With Congress struggling to reach agreement, regulators are adapting. TD Cowen notes that the SEC has shifted away from aggressive enforcement under Chairman Paul Atkins, instead relying on guidance to manage the market.

A joint interpretive release with the CFTC has clarified that most crypto assets are not securities by default. The SEC has also dropped several high-profile cases in recent weeks, a move analysts view as a strategic pause rather than a permanent shift.

Seiberg describes the current approach as “legislating via memo.” Agencies are filling gaps with temporary measures, including joint filings for exchanges and relaxed custody rules that allow banks to participate more easily.

The window for legislative action is narrowing. TD Cowen points to late July as the last realistic opportunity before the congressional recess. Expectations are already being revised lower, with key lawmakers signaling reduced confidence in a near-term deal.

For the crypto market, the result is a prolonged period of uncertainty. While regulatory pressure has eased, the absence of a clear framework continues to shape how firms operate and invest in the U.S.

The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.