Investment bank TD Cowen stated in a Monday note that the long-awaited cryptocurrency Clarity Act has only a slim chance of passing this fall, citing last week's procedural delay and potential stalling by Democrats.

With the bill now unable to pass before the summer recess, TD Cowen assigned just a 25% probability that the legislation clears the Senate in September.

Lawmakers had hoped to hold a critical vote on the crypto market structure bill before a five-week recess. However, news broke last week that the vote would be delayed until lawmakers return from the August break, pushing Senate consideration to September. The delay extends a multi-year congressional effort to establish comprehensive federal rules for digital assets, an area where the Securities and Exchange Commission and the Commodity Futures Trading Commission have long held overlapping and contested jurisdictional claims.

"The bill is not dead, but the path forward is harder," TD Cowen said. "We assign a 75% probability that Clarity fails to become law this fall."

The bank outlined several possible scenarios. One likely outcome: cloture passes initially in September, but Republicans then block Democratic amendments covering ethics and anti-money laundering (AML) provisions, prompting Democrats to sink the second cloture vote. TD Cowen added that it is also plausible no cloture vote takes place at all. Cloture is the Senate's procedural mechanism for ending debate on a bill so it can advance to a final vote.

The Clarity Act has been the product of bipartisan work and was passed by the House of Representatives last year. However, some Republicans have accused Democrats of deliberately stalling the legislation.

If enacted, the bill would establish a federal regulatory framework for U.S. cryptocurrency markets, drawing clearer lines between which digital assets fall under SEC oversight and which fall under the CFTC — a distinction that has been at the center of regulatory disputes and enforcement actions against major crypto firms. The latest draft of the Clarity Act includes language — jointly drafted by Democrats and Republicans — prohibiting government officials from promoting or profiting from cryptocurrency. That draft began circulating in July.

Democrats such as Senator Elizabeth Warren, who has criticized the Clarity Act from the outset, have argued that new legislation would benefit the president and his family.

Major financial institutions — not solely cryptocurrency companies — have backed the bill, including Goldman Sachs and Fidelity, along with law enforcement groups. The breadth of support underscores how digital asset regulation has moved beyond a niche industry concern to a broader financial-sector priority, with traditional banks and asset managers seeking clarity as they expand into crypto-related services.

This article first appeared on Bitcoin Magazine and was written by Mathew Di Salvo.