The cryptocurrency market has yet to price in positive progress on the U.S. Clarity Act, an analysis showed, Decrypt reported on Sept. 14 local time.

Bernstein saw a possibility that a Republican amendment could draw support from some Democrats, a day ahead of a Senate procedural vote.

The Clarity Act is a bill to establish federal-level rules for digital assets and clarify the authority of the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). However, Republicans need Democratic cooperation to advance the bill, and differences over public officials’ cryptocurrency holdings and stablecoin rewards have acted as obstacles.

Bernstein analysts said in a client memo, "The positive surprise is clearly not priced in." They judged that the market is underestimating the chances of progress after Republicans put forward an amendment reflecting ethics rules and banking-sector concerns.

Republicans said the latest draft released on Sept. 13 reflects 126 changes demanded by Democrats. That includes provisions for state attorneys general to participate in enforcing ethics rules. U.S. President Donald Trump has also agreed to strengthened restrictions.

Senator Cynthia Lummis (신시아 루미스), who chairs the U.S. Senate Banking Committee’s digital assets subcommittee, publicly urged Democratic support. "After a year of intense bipartisan daily negotiations, this bill is ready," Lummis said. "Democrats got what they wanted, and now they should respond with a yes," she said.

One of the key issues is how ethics rules will be enforced. The previous wording left enforcement authority for this provision, which is largely aimed at Trump’s cryptocurrency business, only with the Justice Department. The new amendment added a role for state attorneys general and included requirements for asset divestment or a blind trust. Bernstein saw these changes as something that could move some Democratic lawmakers.

Even so, forecasts for the bill’s passage remain mixed. TD Cowen’s Jaret Seiberg said, "This is not an agreement concluded through negotiations. Democrats are being presented with the final product," maintaining a sceptical view. He put the chances of enactment this year at 25 percent. Beacon Policy Advisors, by contrast, raised its estimate to 30 to 40 percent from less than 10 percent.

The amendment also includes measures aimed at concerns about deposit outflows at community banks. The Treasury Department would be able to limit stablecoin rewards if they cause large-scale deposit flight from regional banks. Banks have argued that such reward structures could siphon off deposits used as funding for loans, while the crypto industry has pushed back, arguing rewards need to be maintained. Both sides lobbied senators from their respective states.

A draft released on Sept. 10 largely left the ethics provisions intact and only added a registration requirement for crypto trading protocols controlled by individuals or groups. After that, Republicans put forward another amendment that reflects more Democratic demands, effectively making a last-minute adjustment ahead of the vote.

The situation could change significantly depending on the outcome of the procedural vote. If Congress fails to pass the Clarity Act, the U.S. CFTC plans to use its existing authority to move forward with drawing up crypto rules. Chairman Michael S. Selig directed a review of related rules, but said legislation is needed to create safeguards that will be harder for future administrations to overturn. As a result, the vote is expected to be a turning point in whether the legislative route for the U.S. crypto regulatory framework is maintained or shifts to a regulator-led response.