CLARITY Act Faces 50-50 Odds as Community Banks Step Up Opposition

• Galaxy Research cuts CLARITY Act passage odds to 50% as Senate time runs short
• Nearly 4,000 community banks oppose parts of the bill, warning stablecoins could drain local deposits
• The CLARITY Act remains central to US crypto regulation, while Polymarket traders also see its path becoming more uncertain

The CLARITY Act still enjoys bipartisan backing, but that may no longer be enough to get it across the finish line this year. Galaxy Research has lowered its estimate of the bill becoming law in 2026 to 50%, arguing that the Senate’s shrinking legislative calendar is now the biggest obstacle. Lawmakers continue negotiating key provisions. Amidst this, opposition is also beginning to emerge from groups that say the bill could reshape parts of the traditional financial system.

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Why Galaxy Research Cut CLARITY Act Odds to 50%

Galaxy Research has lowered the probability of the CLARITY Act becoming law in 2026 to 50%, down from 60% earlier this month. They are arguing that the Senate’s packed legislative schedule is narrowing the window for passage.

The research firm said the bill still has to clear the Senate with at least 60 votes before being reconciled with separate legislation from the Senate Agriculture Committee and the House-approved version. With appropriations, national security measures, and other priorities competing for floor time, Galaxy believes the timetable has become the biggest risk. Alex Thorn of Galaxy Digital said,

“In our view, Senate Majority Leader Thune needs to announce floor time by early July at the latest, possibly during the July 4 recess, with the vote itself occurring before the August recess. Absent a scheduling announcement on that timeline, the path slips to September, which runs directly into the midterm dynamics we have warned about, when controversial votes become very hard to schedule.“

Prediction markets have also turned more cautious. On Polymarket, traders currently assign roughly a 44% chance of the CLARITY Act being signed into law this year. This shows the growing uncertainty despite continued industry backing.

The legislation is looked at as one of the most significant crypto bills in the US. This is because it would establish clearer boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), while setting registration standards for digital asset businesses.

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Community Banks Retaliate

The Senate timetable isn’t the only challenge facing the CLARITY Act. The Independent Community Bankers of America (ICBA), which represents nearly 4,000 community banks, has launched a six-figure advertising campaign opposing parts of the legislation. The group’s biggest concern centers on stablecoins. It argues that allowing issuers to offer rewards or incentives could encourage consumers to move deposits away from local banks and into crypto platforms.

According to the ICBA, that shift could pull as much as $1.3 trillion from community banks. This could potentially reduce lending capacity by roughly $850 billion for small businesses, farmers, and local communities. Community banks currently account for more than 60% of small-business loans and about 80% of agricultural lending in the US. The ICBA said,

“American families don’t want experiments with their money. They want jobs, growth, and available credit. When crypto gets a free pass, communities pay the price.”

The debate points to how the conversation around US crypto regulation has expanded beyond regulators and digital asset firms. While crypto companies view the CLARITY Act as a long-awaited framework for the industry, some traditional lenders see it as legislation that could alter the way deposits flow through the banking system.

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