Clarity Act's Odds Lookin' Sketchy: TD Cowen Puts It at a Whopping One-in-Three

The Clarity Act—the crypto market structure bill everyone's been watching—is still stuck in the U.S. Senate, and according to investment bank TD Cowen, chances of it passing this year are looking pretty grim. Spoiler alert: it's not looking good.

The recent compromise proposal on stablecoin yield just isn't cutting it, according to Jaret Seiberg, managing director at TD Cowen's Washington Research Group. Under that proposal, companies wouldn't be able to offer yield on idle stablecoin balances, but they'd still be able to dish out activity-based rewards when stablecoins are actually used. Basically, your USDT just sitting there? Cool, zero rewards for you. Actually using it for something? Here's a participation trophy.

A final stablecoin yield compromise text is expected to drop publicly this week, and the Banking Committee is eyeing the last two weeks of April for a potential markup. Mark your calendars, set reminders, maybe sacrifice a goat to the legislative gods.

Seiberg says there's still time for senators to find a bipartisan compromise that could win over both the crypto sector and banks. The window stays open until Congress heads out for the August recess. Hope springs eternal, apparently.

But here's the thing—even the historically optimistic senators are cooling their jets. Seiberg pointed to a Politico report showing Sen. Mark Warner now puts the odds at 50% to 60%, down from a rosy 80%. Nothing says "vibes are off" quite like a senator walking back their own optimism by thirty percentage points.

TD Cowen's even more bearish. "We see the prospects as lower. To us, there is a one-in-three probability for the Senate to advance a version of the Clarity Act that the House will pass," Seiberg wrote. That's not a bet you'd take to the casino, folks.

Most likely action? Late July, right before the August recess—because apparently it takes the threat of vacation to get senators to compromise. Nothing motivates elected officials quite like the threat of not getting their August beach trips.

Seiberg isn't impressed by the stablecoin yield compromise pushed by Sens. Thom Tillis and Angela Alsobrooks either, calling it a rehash of old discussions that might not satisfy anyone. "The problem is that this would discourage investors from