Uncertainty looms over the passage of the U.S. Clarity Act (a bill aimed at structuring the virtual asset market) before this year’s midterm elections. The third or fourth week of next month, when the Senate is expected to engage in relevant discussions, could be a turning point for the bill’s fate.
On Monday, The Block reported that Jaret Seiberg, Managing Director of TD Cowen’s Washington Research Group, forecasted in a report that the Senate is likely to initiate the voting process for the Clarity Act in the third or fourth week of next month.
Seiberg emphasized that July 24 is a critical deadline. He stated that if the bill doesn’t pass before then, it’s questionable whether it can be addressed before the midterm elections later this year.
President Donald Trump’s position is seen as the most significant variable affecting the Clarity Act’s passage. Recently, Trump declared he wouldn’t sign any bills until the voter identification (ID) bill passes.
This Republican-led bill mandates voter ID and proof of citizenship during elections while also limiting mail-in voting.
Seiberg noted that while Trump might make an exception for the Clarity Act, the uncertainty could delay the bill’s progress.
Regulations concerning public official ethics have also become a contentious issue. Democrats are pushing for measures that would prohibit senior government officials, including the President and their families, from engaging in virtual asset businesses.
The Trump family is involved in virtual asset projects such as World Liberty Financial (WLFI) and the mining company American Bitcoin.
Seiberg explained that Trump shows no willingness to compromise, potentially forcing Democrats to reject the ethics-related amendments.
Seiberg has consistently expressed skepticism about the Clarity Act passing this year. Last week, Galaxy Research lowered its forecast for the bill’s passage from 60% to 50%, citing the Senate’s packed schedule and time constraints.
Earlier this month, global investment bank JP Morgan also projected the bill’s chances of passing this year at less than 50%, considering the midterm election schedule and ongoing debates over interest payments on stablecoins.
Currently, the virtual asset industry argues that interest payments on stablecoins are crucial for ecosystem operations, while the financial sector opposes this, citing potential risks such as deposit flight.