The delay in the approval of the CLARITY Act is now pushing traditional banks, which were once against crypto, to demand the approval.
As of the latest update, Jane Fraser, CEO of Citigroup, recently backed the market structure bill, arguing that more transparent crypto regulations would improve financial system predictability and enable banks and crypto firms to operate under comparable regulations.
Speaking with Fox Business, Fraser said,
So we have not given up on pushing to get some improvements made to the bill, but we would like to see a good bill go through. I think it would be excellent for the system.
The bank remains pessimistic for Bitcoin
This is a bit eye-catching because Citi is still cautious about Bitcoin [BTC]. In fact, the bank has also lowered its 12-month target from $112,000 to $82,000 due to softer demand, weak ETF inflows, and stalled regulation.
While many think that Bitcoin could eventually reach $1 million due to institutional adoption and more transparent regulations, Citi sees a $53,000 (bear case)–$108,000 (bull case) price target.
Nevertheless, despite Citi’s pessimism, Wellington-Altus Private Wealth’s Chief Market Strategist James Thorne is essentially bullish on Bitcoin, as he said,
Galaxy Research lowers odds of CLARITY passage
This comes as Galaxy Research has drastically lowered its prediction that the U.S. CLARITY Act will pass into law in 2026 from its initial projections to just 10%. This is primarily because the bill has stalled in political negotiations.
Needless to say, the bill needs 60 Senate votes to pass, but support has been eroded by a number of factors.
This includes lawmakers still split over ethics regulations pertaining to government officials and cryptocurrency.
Additionally, banks, especially community banks, lobbying against parts of the bill involving stablecoin yields and some lawmakers want more robust safeguards against illicit finance.
As a result, Senate Majority Leader John Thune decided not to bring the bill to a vote before the August recess. While a vote is now scheduled for the 15th of September, when the Senate reconvenes, lawmakers have a very short window of time before they focus on the midterm elections.
This makes passage very challenging, according to Galaxy.
What to expect?
Meanwhile, Polymarket odds have further decreased to 19%.
This aligns with AMBCrypto’s earlier report that September may be a pivotal month for cryptocurrency due to the simultaneous arrival of multiple significant catalysts.
Though Bitcoin has avoided a negative September since 2022, September has historically been a weak month for the cryptocurrency.
As a result, Bitcoin may gain if CLARITY moves forward and the Fed issues a favorable ruling. If not, September may turn out to be an especially challenging month for cryptocurrency.
Final Summary
- Though Citigroup is pushing for the CLARITY Act approval, its Bitcoin price target has fallen to $82,000.
- Galaxy Research drops CLARITY Act approval odds to 10% and Polymarket odds have reached 19%.
