The window for Congress to deliver a sweeping digital asset regulatory framework in 2026 is getting smaller by the week. Galaxy Digital, one of the more closely watched institutional voices in crypto policy analysis, just cut its probability estimate for the CLARITY Act becoming law this year from 75% down to 60%.

The culprit isn’t opposition so much as the calendar. The Senate faces an August recess starting in late July, and the list of unresolved policy questions is long enough to make even optimists nervous.

What changed, and why it matters

Galaxy’s head of research Alex Thorn laid out the shift in a note on Friday.

“On May 22, we raised our estimate of the probability that the CLARITY Act becomes law in 2026 to 75%, up from the 55% we published the morning of May 14’s Senate Banking markup. We are now lowering that estimate to 60%.”

That markup on May 14 was supposed to be the momentum moment. The Senate Banking Committee advanced the bill with a 15-9 bipartisan vote. The House had already done its part, passing its version of the legislation, H.R. 3633, back in July 2025.

The CLARITY Act, formally known as the Digital Asset Market Clarity Act, would create the first comprehensive federal framework for digital assets in the US. It would draw clear jurisdictional lines between the SEC and CFTC, establish formal categories for digital commodities versus investment contracts, and replace the current regime of regulation-by-enforcement with something more predictable.

The Senate’s calendar problem

Several policy issues remain unresolved. Stablecoin yield provisions need to be worked out. Ethics rules are still being debated. And safeguards against illicit finance haven’t been fully addressed.

Galaxy isn’t alone in its skepticism. JPMorgan analysts have assessed a less than 50% chance of the bill passing, citing similar legislative constraints. Prediction markets tell a similar story. Polymarket pricing for CLARITY Act passage has been fluctuating in the 50-68% range.

Meanwhile, over 200 crypto firms have initiated calls for a Senate vote.

What this means for investors

The CLARITY Act represents the kind of regulatory certainty that institutional capital has been waiting for before committing more deeply to digital assets. A clear statutory framework would allow firms to know whether their token is a commodity or a security, and exchanges would know which regulator to register with.

If the CLARITY Act doesn’t pass before the election, a bill that had bipartisan momentum in June could find itself orphaned by December if congressional priorities reshuffle. Post-election dynamics are notoriously unpredictable for policy priorities.

The 60% probability Galaxy assigns is still more likely than not. But it’s a meaningful retreat from the 75% confidence level of just weeks ago. The CLARITY Act could still pass — bipartisan support exists, the House version is already done, and the industry is lobbying hard. But the distance between a bill that has support and a bill that becomes law is measured in Senate floor hours, and those are running dangerously short.