Bernstein Sees Improved Odds for CLARITY Act
Wall Street research and brokerage firm Bernstein says recent Republican concessions on ethics rules and stablecoin-related concerns could improve the chances of bipartisan support for the CLARITY Act as the cryptocurrency market structure bill approaches a crucial Senate vote.
Bernstein analysts led by Gautam Chhugani said the latest negotiations suggest there could be more progress on the legislation than markets expected last week. The analysts argued that recent concessions could persuade at least some Democratic senators to support the bill’s upcoming procedural vote.
The assessment comes just ahead of the Senate’s expected September 15 cloture vote, which could determine whether lawmakers can move the legislation forward.
Ethics Concessions Could Be Key to Democratic Support
According to Bernstein, the most important development has been movement on the bill’s ethics provisions.
Senate Republicans released an updated version of the CLARITY Act that incorporated 126 substantive changes requested by Democrats, according to recent reporting. The revised proposal also reflects an agreement involving President Donald Trump on significant portions of a bipartisan ethics package.
The proposed ethics provisions would place additional restrictions on certain crypto-related activities involving federal officials and could require divestment or the use of blind trusts for qualifying crypto holdings.
The package also gives state attorneys general a role in enforcing certain restrictions, a measure that has been important to Democrats seeking stronger safeguards.
Bernstein described the latest ethics offer as potentially sufficient to bring a handful of Democratic senators on board for the procedural vote.
Trump Accepts Most of Bipartisan Ethics Proposal
The ethics negotiations have focused heavily on concerns about potential conflicts of interest surrounding Trump’s cryptocurrency activities.
According to the Associated Press, Trump agreed to approximately 80% of a proposal developed by Republican Senator Thom Tillis and Democratic Senator Ruben Gallego.
Among the proposed restrictions are provisions preventing Trump and his wife from issuing digital assets and requirements that could force the president to divest certain crypto holdings or place them in a blind trust if they exceed specified thresholds.
The agreement is significant because Democratic opposition to the original ethics language had emerged as one of the biggest obstacles to securing the votes needed to advance the CLARITY Act.
Stablecoin Concessions Could Also Help
Ethics rules are not the only area where negotiations have produced movement.
Stablecoin provisions have been another major point of disagreement surrounding the legislation.
The CLARITY Act has been shaped by negotiations over how stablecoin issuers and other companies can provide rewards or incentives to users.
Earlier Senate negotiations produced a compromise that would prohibit passive yield paid simply for holding a payment stablecoin, while allowing certain activity-based rewards tied to payments, transfers or platform use.
The issue has attracted significant attention from banks and the cryptocurrency industry.
Traditional banks have argued that certain stablecoin reward structures could create an uneven competitive environment between banks and crypto companies, particularly because banks rely heavily on deposits to fund lending.
Crypto companies, meanwhile, have sought flexibility to provide incentives to users without violating stablecoin regulations.
Why Stablecoin Rules Matter to Democrats
Stablecoin provisions have broader implications than simply determining whether users can earn rewards.
Stablecoins have become an important part of the digital asset market and are increasingly being considered for payments and financial applications.
The GENIUS Act, enacted in 2025, established a federal framework for payment stablecoins and prohibited interest or yield payments to holders of qualifying payment stablecoins. Subsequent negotiations around the CLARITY Act have focused partly on how related incentives should be treated.
The latest compromises could therefore help address concerns from both financial institutions and lawmakers who want to prevent regulatory loopholes while still allowing legitimate digital asset innovation.
Bernstein Says Markets May Be Underpricing a Positive Surprise
Bernstein’s latest assessment is notable because the firm believes markets may not be fully pricing in the possibility of progress.
The analysts said crypto markets have entered the week with a bearish bias ahead of the Senate vote and the Federal Reserve’s upcoming policy decision.
They argued that “any positive surprise is definitely not priced in”, suggesting that an unexpected advance for the CLARITY Act could produce a stronger market reaction than investors currently anticipate.
Prediction-market odds for passage had also risen above 30% by Monday, according to Bernstein’s analysis.
That does not mean passage is assured. Instead, Bernstein’s view suggests that the market may have become overly pessimistic about the legislation following weeks of delays and political disagreements.
Senate Vote Could Be a Major Test
The Senate is expected to hold a key procedural vote on the CLARITY Act on September 15.
The vote is particularly important because the legislation needs bipartisan support to clear the Senate’s procedural threshold.
The bill has already faced a prolonged negotiation process involving lawmakers, the White House, the cryptocurrency industry and banking organizations.
The outcome could determine whether Congress moves closer to establishing a comprehensive federal framework for digital asset markets or whether the legislation faces another delay.
What Is the CLARITY Act?
The Digital Asset Market Clarity Act, commonly known as the CLARITY Act, is designed to establish a clearer regulatory structure for digital assets in the United States.
One of its primary objectives is to clarify the respective responsibilities of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The legislation seeks to provide clearer rules for digital asset issuers, exchanges, intermediaries and other market participants.
Supporters argue that a comprehensive market structure law could reduce regulatory uncertainty and provide a more predictable environment for crypto businesses operating in the United States.
The legislation has also become politically important because both parties have sought to influence its final provisions.
Why Democrats Have Been Reluctant to Support the Bill
Democratic senators have raised several concerns about the legislation.
The most politically sensitive issue has been the treatment of cryptocurrency-related conflicts of interest involving Trump and other federal officials.
Democrats have argued that the original ethics provisions did not go far enough to address Trump’s extensive involvement in cryptocurrency ventures.
The updated proposal attempts to address those concerns through restrictions on crypto issuance, potential divestment requirements and enforcement authority for state attorneys general.
Other Democratic concerns have included consumer protections, illicit finance safeguards and the potential impact of digital assets on traditional financial institutions.
Crypto and Banking Groups Are Lobbying Senators
The CLARITY Act negotiations are taking place amid intense lobbying from both the cryptocurrency and banking industries.
Crypto advocacy organizations have spent significant resources encouraging senators to support the bill, arguing that regulatory uncertainty threatens U.S. innovation and competitiveness.
Banking organizations have pushed back on portions of the legislation, particularly provisions they believe could create competition for bank deposits or allow crypto companies to offer financial incentives that resemble deposit products.
Reuters reported that both industries have intensified their lobbying campaigns as the Senate vote approaches.
The competing interests have made the final negotiations particularly complicated.
Could Democrats Face Political Pressure to Support CLARITY?
Bernstein also sees a political calculation that could influence Democratic senators.
The analysts noted that some Democrats may be reluctant to be perceived as anti-crypto ahead of the 2026 midterm elections.
The cryptocurrency industry has become an increasingly influential political force and has supported candidates from both parties.
That could make the CLARITY Act a more complicated vote for Democratic senators, particularly those representing states where cryptocurrency companies, investors or blockchain businesses have significant economic or political influence.
However, Democratic lawmakers still face pressure from consumer advocates and other groups concerned about the bill’s regulatory and ethics provisions.
What Happens If the Senate Vote Succeeds?
A successful procedural vote would not mean the CLARITY Act immediately becomes law.
Instead, it would allow the Senate to continue consideration of the legislation.
Lawmakers could still debate amendments and negotiate additional changes before a final Senate vote.
If the Senate ultimately passes legislation that differs from the House version, the two chambers would need to resolve their differences before the bill could reach President Trump.
The House previously passed its version of the CLARITY Act with substantial bipartisan support, giving the legislation an existing congressional foundation.
What Happens If the Vote Fails?
A failed vote could significantly change the outlook for U.S. crypto regulation.
The White House has already indicated that it is prepared to rely more heavily on agency-level rulemaking if Congress fails to pass comprehensive market structure legislation.
White House crypto adviser Patrick Witt recently said the administration would quickly move to an “aggressive rulemaking agenda” at the SEC and CFTC if the CLARITY Act fails. That would provide an alternative route toward regulatory changes, although agency rules would not provide the same statutory foundation as congressional legislation.
A failed Senate vote could therefore lead to another period of uncertainty for crypto companies and investors.
Why the Latest Concessions Matter
Bernstein’s analysis suggests the significance of the latest negotiations lies in their ability to address multiple sources of opposition simultaneously.
The ethics concessions target a major Democratic objection.
The stablecoin changes attempt to address concerns from banks and lawmakers over competition and consumer protections.
Together, those changes could make it easier for Senate leaders to build the bipartisan coalition required to move the legislation forward.
The analysts nevertheless stopped short of saying passage is guaranteed.
Crypto Markets Could React to the Outcome
The CLARITY Act has increasingly become a market catalyst for digital assets.
A successful procedural vote could reinforce expectations that the United States is moving toward clearer cryptocurrency regulations.
That could potentially improve sentiment toward crypto exchanges, blockchain companies and digital assets.
Conversely, failure to advance the bill could increase uncertainty and potentially pressure crypto-related stocks and tokens.
Bernstein warned that the combination of the CLARITY Act vote and the Federal Reserve’s monetary policy decision makes the current week particularly important for crypto markets.
The firm said a hawkish Federal Reserve outcome combined with failure of the CLARITY Act could create a particularly negative environment for digital assets.
Bottom Line
Bernstein believes new ethics and stablecoin concessions could improve the chances of Democratic support for the CLARITY Act, potentially giving Senate leaders a path toward advancing the legislation.
The latest version incorporates numerous changes requested by Democrats, while President Trump has agreed to major portions of a bipartisan ethics proposal that includes potential divestment or blind-trust requirements and a role for state attorneys general in enforcement.
The Senate’s expected September 15 procedural vote will provide an important test of whether those concessions are enough to attract the votes needed to move forward.
For the cryptocurrency industry, the stakes are high. Passage could bring the United States closer to a comprehensive digital asset market structure framework, while failure could push the Trump administration toward more aggressive SEC and CFTC rulemaking instead.
Bernstein’s view is that the market may be underestimating the possibility of a positive legislative surprise. Whether that optimism is justified should become clearer when senators vote.
Also Check: Patrick Witt Warns of Aggressive SEC, CFTC Crypto Rulemaking if CLARITY Act Fails
