Crypto Market‑Structure Bill Now A Long Shot — TD Cowen Puts 2026 Approval At One‑Third

Due to growing political tension and ongoing talks between the banking and cryptocurrency industries, TD Cowen has drastically lowered its estimate of the likelihood that the long-awaited CLARITY Act, the proposed US crypto market-structure bill, will become law this year. 

The investment bank’s managing director, Jaret Seiberg, now places the probability of Senate passage and subsequent House approval at roughly one‑in‑three, a markedly more pessimistic assessment than earlier expectations.

Coinbase And Banks Spar Over Stablecoin Yield

Senators are reportedly preparing to circulate a revised draft of the CLARITY Act as soon as this week. The bill is intended to establish a regulatory framework for digital assets, but one of its most consequential provisions would broadly prohibit platforms from providing yield “directly or indirectly” on stablecoins.

That restriction has prompted strong objections from major crypto firms and complicated talks with banking interests. Coinbase’s global head of investment research said last week the industry is coordinating a counterproposal.

Seiberg argues the proposed stablecoin restriction is fraught with tradeoffs. “The problem is that this would discourage investors from using stablecoins as a way to invest excess liquidity, which is why platforms like Coinbase would object,” he wrote. 

From the banks’ perspective, limiting stablecoin yield is also beneficial because it reduces the incentive for crypto platforms to use stablecoins for everyday payments — an outcome banks view as a threat to core deposits.

Beyond stablecoin yield, several other complex and unresolved subjects remain likely to shape final negotiations: safeguards for decentralized finance (DeFi), token classification, and rules for tokenizing real‑world assets (RWAs). 

Those issues have proven difficult to reconcile across the political and industrial divides, and they are keeping lawmakers and industry groups locked in detailed bargaining.

Senators Temper Optimism On Crypto Bill

TD Cowen’s Managing Director also noted that even lawmakers who had previously expressed confidence about passage are tempering expectations. 

Politico reported that Senator Mark Warner reduced his estimate for passage to between 50% and 60%, down from earlier forecasts near 80%. “The signs are not pointing to success,” Seiberg observed.

Seiberg expects the most likely window for action to be in late July, arguing that the threat of the recess could force senators toward compromise. “We see the prospects as lower. To us, there is a one‑in‑three probability for the Senate to advance a version of the CLARITY Act that the House will pass,” he wrote. 

He added that the only plausible route to enactment, in his view, would be for Congress to push through a compromise despite objections from both Coinbase and the banking sector — a scenario he described as possible but unlikely, since Congress usually only takes that course intermittently.

For now, uncertainty persists around whether the bill’s language can be adjusted to satisfy both sides. A key procedural milestone to watch is the markup date for the Senate Banking Committee, which will signal whether negotiators are ready to move from drafting to formal consideration.

Featured image from OpenArt, chart from TradingView.com