U.S. Cryptocurrency Legislation Faces Critical Juncture

Galaxy Digital's research head, Alex Thorn, has issued a warning regarding the pivotal moment for the U.S. cryptocurrency legislation known as the CLARITY Act. According to BlockBeats, if the review is delayed beyond mid-May, the likelihood of its passage by 2026 will significantly decrease. Currently, the probability of the bill becoming law this year is estimated at around 50% or even lower. Data from Polymarket indicates that its passage probability has dropped from 82% in February to 47%. Thorn highlighted that the Senate's schedule is currently filled with discussions on military authorization for Iran, funding for the Department of Homeland Security, and presidential nominations, leaving limited time for the bill. If the Democrats regain control of the House after the November midterm elections, legislative progress could stall. Although the bill passed the House last July with a bipartisan majority of 294-134, negotiations in the Senate are more complex, facing several hurdles. The primary reason for the delay since January is the disagreement over stablecoin rewards. Additionally, a provision in the draft clarifying that non-custodial software developers are not "money transmitters" has faced opposition from law enforcement. Furthermore, ethical clauses are being pushed by some Democrats to restrict government officials and their families from profiting from crypto assets during their terms. Concerns over the SEC's authority and vacant commissioner seats add to the political complexity. Thorn believes that a full Senate vote in July is "theoretically possible," but it would require extraordinary political will and coordination.