The bank said the bill faces major hurdles, with passage boosting institutional crypto adoption and delays prolonging regulatory uncertainty.

• Jefferies said the Clarity Act faces a difficult path through the Senate, with shrinking legislative time and unresolved political concerns.
• Passage would unlock the next phase of institutional digital asset adoption, while delays would prolong regulatory uncertainty.
• The bank expects elevated volatility in crypto tokens and blockchain-related equities as the bill's prospects become clearer.

The Clarity Act still faces significant hurdles despite clearing the Senate Banking Committee, with investment bank Jefferies warning that political uncertainty could fuel volatility across crypto markets in the coming weeks.

The bill passed committee in a bipartisan 15-9 vote earlier this year, but the bank warned that tougher challenges lie ahead. Polymarket now puts the odds of passage by the end of 2026 at 48%, down from 70% in mid-May as concerns over ethics provisions, illicit finance and limited Senate floor time weigh on its prospects.

Lawmakers have roughly 20 legislative days before the August recess to merge competing Senate versions, clear procedural votes, reconcile the measure with the House bill and send it to President Donald Trump.

"Failure to pass Clarity before the August recess could push the bill out to next year, or even later, if Democrats flip the Senate in November," analysts led by Andrew Moss said in the Tuesday report.

The Clarity Act is widely viewed as the crypto industry's most important market structure bill because it would establish clear rules for when digital assets are regulated as securities by the Securities and Exchange Commission (SEC) or commodities by the Commodity Futures Trading Commission (CFTC), replacing years of regulatory uncertainty.

Supporters say that legal clarity would make it easier for banks, asset managers and other institutions to launch tokenized products, custody services and blockchain-based financial offerings, potentially unlocking broader institutional adoption and investment in the sector.

According to Jefferies, passage would provide the durable regulatory framework banks, asset managers and exchanges need to expand tokenization, custody, staking, lending and other blockchain-based services. The bank also expects it to accelerate tokenized securities, broaden crypto exchange-traded fund (ETF) offerings beyond bitcoin

A delay, however, would extend regulatory uncertainty. While recent SEC, CFTC and OCC guidance has improved the outlook, the report said agency actions can be reversed by future administrations, potentially prompting regulated financial institutions to slow blockchain initiatives while reassessing legal and compliance risks.

The bank's analysts expect the legislative process to drive volatility in crypto-linked equities including Circle (CRCL), Coinbase (COIN) and CoinDesk's owner Bullish (BLSH), as well as select crypto tokens.

For Circle, the bank sees mixed implications. The current bill would reportedly close a loophole allowing third parties such as Coinbase to offer rewards on USDC holdings, potentially slowing USDC growth. At the same time, a delay would give Circle more time to expand its payments network and diversify revenue beyond stablecoin reserve income.

Longer term, Circle's biggest risk is intensifying competition rather than legislation, as banks, fintechs and payments firms launch rival stablecoins with larger distribution networks, the report added.

JPMorgan (JPM) said in a report earlier this month that the proposed U.S. crypto market structure bill may have only a limited window for passage this year as the congressional calendar tightens ahead of the midterm elections and debate over stablecoin yield remains unresolved.

Read more: JPMorgan warns time is running short for crypto market structure bill

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