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TD Cowen: U.S. CLARITY Act likely to pass in 2027… Conflict-of-interest provision is the biggest variable
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- TD Cowen said the CLARITY Act may make some progress but actual passage is likely after 2027.
- The report identified the conflict-of-interest prevention provision as the biggest obstacle to the virtual-asset market-structure bill, noting that the Democratic Party insists on restricting senior officials and their families from virtual-asset businesses.
- The report said a compromise to delay the application of the conflict-of-interest provision by 3 years could be discussed to secure passage of the bill.
- The article was summarized using an artificial intelligence-based language model.
- Due to the nature of the technology, key content in the text may be excluded or different from the facts.
The U.S. virtual-asset market-structure bill, the 'CLARITY Act', may see some progress this year, but an analysis says the actual legislative passage is likely to be pushed back to 2027 or later.
On the 6th (local time), The Block reported that investment bank TD Cowen said in a recent report, "There is consensus on the basic direction for market structure, but unless politically charged provisions are resolved, substantive legislation will inevitably be delayed," adding, "The framework for virtual-asset regulation is unlikely to be in place before 2027 at the earliest."
The report said, "The key obstacle in the U.S. virtual-asset market-structure bill is the 'conflict-of-interest prevention provision'," explaining, "The Democratic Party insists on restricting senior officials and their families from owning or operating virtual-asset-related businesses, and this includes the president."
In particular, the report analyzed that "the potential involvement of President Donald Trump and his family in virtual-asset businesses is emerging as a political issue." This has made discussions on the bill structurally complex, and achieving bipartisan agreement could take considerable time.
TD Cowen also suggested the possibility of a compromise to delay the application of the conflict-of-interest provision by about 3 years to secure passage of the bill. Delaying that provision until after the current administration's term could reduce political burden while gaining legislative momentum.
