Analysis: The CLARITY Act is feared to be delayed until 2027, and large crypto firms may expand their advantages amid the regulatory vacuum.

The U.S. Senate will enter recess on August 7, leaving an extremely narrow window for the CLARITY Act to pass before then. If a vote is not completed this week, the next viable timeline will be pushed to September; a further delay could push the bill’s implementation to after the midterm elections, meaning it may not take effect until 2027. Key sticking points on the bill currently involve Democrats’ insistence on adding ethics clauses for senior government officials engaged in crypto-related work, though the merged draft has not yet incorporated such provisions. During the regulatory vacuum, large crypto institutions like Coinbase and Circle are better able to adapt to uncertain environments thanks to their capital strength: ARK Invest increased its holdings in both companies this week, while Circle secured a federal national trust bank charter in July. By contrast, small and mid-sized crypto firms and DeFi projects continue to face pressure. On the market front, Polymarket data shows the probability of the CLARITY Act passing in 2026 has dropped to 23%, a sharp decline from Galaxy Research’s mid-May forecast of 67% to 75%. (Cryptopolitan)