CLARITY Act Passage Odds Plunge as Republicans Reject Democratic Proposal

CLARITY Act Faces Fresh Setback

Prediction markets have significantly reduced their expectations for the crypto market structure bill after negotiations between Senate Republicans and Democrats remained deadlocked just hours before a crucial procedural vote.

The CLARITY Act’s prospects of clearing the Senate took another hit Tuesday after Republicans rejected a Democratic counterproposal, leaving the two parties with substantial differences ahead of the key vote.

Sen. Cynthia Lummis (R-Wyo.), a leading Republican negotiator on the legislation, said the Democratic offer showed little change from the position lawmakers had maintained before the August recess.

“Senate Democrats’ counter offer looks identical to their opening position at the start of recess,” Lummis said in a statement shared with CoinDesk. She argued that Republicans had made significant concessions across the negotiations, including accepting nearly all of the Tillis-Gallego ethics framework, while Democrats had made no comparable movement.

Lummis added that Democrats need to begin genuine negotiations rather than presenting the same demands again and describing them as progress.

Prediction Markets Cut Expectations

Polymarket traders now see only a 14% probability that the CLARITY Act will become law during 2026. That figure stood at roughly 30% about 24 hours earlier, highlighting how quickly sentiment changed.

Kalshi also reflected the growing uncertainty, with traders pushing expectations for a legislative breakthrough further into the future. The probability of a crypto market structure bill becoming law before Oct. 1, 2027, dropped to 36% Tuesday, compared with about 53% Monday morning.

The shift was even more apparent when compared with Monday’s outlook. Traders had assigned a 53% chance of passage before July 1, 2027. By Tuesday, the market instead gave a 51% probability that the CLARITY Act or another qualifying crypto market structure bill would become law by Jan. 1, 2028.

Optimism Reverses After Monday Rally

The latest decline follows a sharp improvement in prediction-market odds on Monday, when expectations rose on hopes that Republican concessions could help end the months-long impasse.

That optimism weakened after banking organizations urged lawmakers to impose tighter limits on stablecoin interest and rewards. At the same time, a bipartisan group of state attorneys general cautioned that the legislation could reduce states’ ability to address fraud involving cryptocurrencies.

Republicans released what they described as their final draft over the weekend after incorporating more than 100 changes requested by Democrats. The revisions included concessions involving ethics provisions.

The Senate is scheduled to vote Tuesday afternoon on whether to invoke cloture on the motion to proceed. The procedural step requires 60 votes, making bipartisan support critical for the bill to advance.