Jefferies: The CLARITY Act faces a key Senate test, which may exacerbate volatility in the crypto market.

Investment bank Jefferies stated in a recent report that the U.S. CLARITY Act still faces major legislative hurdles in the Senate, and progress on the related legislation in the coming weeks could intensify volatility in the crypto market. Jefferies noted that although the bill previously passed the Senate Banking Committee with a bipartisan vote of 15 to 9, with only around 20 legislative days remaining until Congress’s August recess, the Senate still needs to complete bill reconciliation, procedural votes, coordination with the House of Representatives’ version, and submission to the president for signing—leaving very little time. Polymarket data shows the probability of the bill passing by the end of 2026 has dropped to 48% from 70% in mid-May. Jefferies believes that if the bill is enacted smoothly, it will establish a clear regulatory framework for digital assets, pushing banks, asset management institutions, and exchanges to accelerate their deployment of tokenized assets, custody, staking, lending, and other businesses, while spurring more crypto ETFs and crypto infrastructure companies to go public via IPOs. If legislation is delayed, it could prolong regulatory uncertainty, leading traditional financial institutions to slow their advancement of blockchain-related operations. The report forecasts that the bill’s progress will continue to impact the market performance of crypto-related stocks including Circle (CRCL), Coinbase (COIN), and Bullish (BLSH), as well as select crypto assets. Jefferies also pointed out that in the long term, compared with regulatory changes, stablecoin issuer Circle faces a greater challenge from competition with banks, fintech firms, and payment companies.