Bernstein says ethics and stablecoin changes could boost support for CLARITY Act

Wall Street research firm Bernstein is flagging a meaningful shift in the political calculus surrounding the CLARITY Act, the sweeping digital asset regulatory bill headed for a Senate cloture vote. Analysts led by Gautam Chhugani argue that new ethics provisions and stablecoin concessions embedded in the final draft could peel off enough Democratic votes to push the legislation forward.

The updated bill runs 635 pages and incorporates 126 substantive changes that Democrats specifically requested. That’s a lot of red ink for a piece of legislation that already cleared the Senate Banking Committee on a 15-9 bipartisan vote back in May 2026.

Ethics rules take center stage

The most politically charged addition draws from the Tillis-Gallego proposal and targets something Democrats have hammered on for months: the appearance of conflicts of interest at the highest levels of government.

Under the new framework, senior officials, including presidents-elect, would be barred from retaining significant equity interests valued at $15,000 or more in businesses that issue tokens. The only exceptions involve full divestment or parking assets in a blind trust.

Stablecoin yield gets a circuit breaker

The stablecoin provisions might matter even more to the industry’s day-to-day operations. The CLARITY Act introduces what Bernstein describes as a Treasury “circuit-breaker” mechanism designed to manage stablecoin yield practices that could trigger deposit outflows from community banks.

The bill draws a specific line in the sand. Passive yields equivalent to traditional bank deposits are off the table. Stablecoin issuers would only be permitted to offer activity-based rewards, meaning users would need to actually do something, like provide liquidity or participate in a protocol, rather than simply parking their dollars and collecting interest.

What the prediction markets say

Prediction markets appear to be recalibrating their expectations for the bill’s chances. Support odds climbed above 30% following the release of the final draft, which, while not exactly overwhelming confidence, represents a notable increase from where sentiment sat before the concessions were announced.

The 15-9 committee vote from May is worth revisiting here. That margin suggests at least some Democrats on the Banking Committee were already on board before the 126 additional changes were integrated. The question now is whether those changes are sufficient to bring the broader Democratic caucus along, or at least enough members to clear the 60-vote threshold needed for cloture.

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