CLARITY Act Might Fail — Bernstein Says Here Is What Crypto Markets Should Expect

The CLARITY Act is entering what could be its final week for passage in 2026 with no scheduled Senate floor vote, no ethics agreement, and the White House still silent on the bipartisan counterproposal submitted last Thursday by Senators Thom Tillis and Ruben Gallego. 

Against that backdrop, Bernstein sent a note to clients Monday laying out what a failure to pass the bill this year would mean for crypto markets — and what happens next either way.

Here Is What Bernstein Says Happens to Crypto Next 

In the note, led by analyst Gautam Chhugani, Bernstein described the CLARITY Act as the most consequential crypto market structure bill in US history and said the Senate has only the current week before its August recess to approve it. 

If it fails, the firm said digital asset markets would likely face a negative immediate reaction — a near-term pressure point driven by the removal of a catalyst that has been closely tied to market sentiment for months.

But Bernstein did not frame failure as the end of the regulatory story. The firm said it expects the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) to accelerate rather than slow down under Project Crypto if the bill does not pass — with interpretive releases on token classifications, decentralized finance (DeFi), and self-custody on the near-term agenda.

Bernstein also said regulatory support for tokenization initiatives would likely continue regardless of the bill’s outcome, including tokenized real-world assets, perpetual futures linked to those assets, and prediction markets — areas where both the SEC and CFTC have already signaled openness under the current administration.

That view aligns with what SEC Chair Paul Atkins said publicly last week — that the agency is ready, willing, and able to write crypto rules through its own rulemaking authority if Congress does not deliver on the CLARITY Act. 

Atkins described a statutory framework as the preferred path to future-proofing regulation, but made clear the SEC would not wait indefinitely.

Bernstein was direct about its preference. A statutory framework, it argued, would give the industry more durable and lasting clarity than agency rules, and would provide the confidence banks, broker-dealers, and exchanges need to commit meaningful capital and resources to digital assets. Losing that outcome to a procedural failure in the final week would be, in Bernstein’s words, disappointing.

CLARITY Act Vote Is Coming 

Senate Majority Leader John Thune told reporters Monday he still expects an initial vote on the CLARITY Act before the recess, saying “I think market structure we’ll get a vote on” while acknowledging the chamber has a packed legislative window to work through. The procedural vote, if it comes, would arrive with the bill’s central unresolved issue still open. 

The White House has not responded to the ethics counterproposal Tillis and Gallego sent last Thursday — a bipartisan attempt to bridge the gap between Republican and Democratic positions on how to prevent government officials from profiting off the crypto industry while in office.

As CryptoDepth has reported, seven Democratic negotiators said last week’s CLARITY Act draft text fell short. Prediction market Polymarket currently puts the odds of passage at 33%. Galaxy Research has its estimate at 30%. 

The bill needs at least seven Democratic votes to clear the 60-vote threshold required to overcome a filibuster — and that coalition has not materialized despite weeks of negotiations.

Featured image generated with OpenArt.