The Clarity Act is facing serious challenges as its chances of overcoming key Senate hurdles have sharply declined. Republicans, particularly Senator Cynthia Lummis from Wyoming, rejected the Democrats' proposal, which has not significantly changed from their previous positions.
Republican and Democrat Positions
Senator Lummis stated in a statement that the Democrats' proposal is similar to their initial position before the summer recess. She emphasized that Republicans have made significant progress on all fronts and have positively responded to most of the requests related to the Tillis-Gallego ethical framework. She also suggested to the Democrats that to reach a real agreement, they need to start negotiations and not just reiterate previous demands.
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Decreased Predictions in the Prediction Market
According to existing forecasts, the chance of passing the Clarity Act has decreased to only 14% by 2026, while this figure was about 30% 24 hours ago. Additionally, in the prediction market, traders are gradually delaying the timeline for passing any legislation related to the cryptocurrency market structure. The chance of passing this law before October 1, 2027, has decreased to 36%, while this figure was about 53% on Monday.
A comparison with Monday's predictions shows that traders believed this law or another related to the cryptocurrency market structure would only be passed by January 1, 2028.
These sudden changes in predictions occurred after prediction markets rose on Monday due to hopes for concessions from Republicans. However, this optimism quickly faded as banking groups pressured lawmakers to impose restrictions on interest and rewards for stablecoins, and a bipartisan group of state attorneys general warned that this law could undermine states' ability to combat cryptocurrency-related fraud.
After making more than 100 requested changes from Democrats, including concessions related to ethical regulations, Republicans released their final version over the weekend. The Senate is set to vote on Tuesday afternoon to see if they can gather 60 votes to advance this proposal.
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