Prediction-market odds on the CLARITY Act becoming law in 2026 have collapsed from 82% in February to under 20%, with Galaxy Digital cutting its own estimate to 10% on August 14. The Senate will not vote before a September 15 cloture deadline that leaves little room for compromise, and three unresolved disputes — stablecoin yield, DeFi classification and ethics rules tied to President Trump's crypto income — are behind the collapse.
Polymarket's odds that the CLARITY Act becomes law in 2026 have collapsed from 82% in February to under 20% by mid-August, and Galaxy Digital cut its own estimate to 10% on August 14. The bill that once looked like crypto's best shot at a permanent US regulatory framework is now stuck behind three disputes that seven months of negotiation have not closed.
The Senate ran out of runway
The Senate confirmed on August 6 that it would not vote on the 309-page bill before the August 7 recess. Lawmakers return September 14, and the cloture motion filed by Senate Majority Leader Thune ripens September 15 — leaving roughly 14 working days before midterm politics consume the floor. The GENIUS Act, a narrower stablecoin bill, needed 11 days of floor time; the CLARITY Act is broader and more contested.
Three disputes, three constituencies
The bill would prohibit yield on idle stablecoin balances while permitting activity-based rewards through DeFi, a distinction that threatens Coinbase's $1.35 billion in annual USDC rewards revenue and pits the exchange against the banking lobby. A second fight centers on how decentralized a network must be before its token stops counting as a security. But the most politically toxic dispute concerns President Trump's $1.4 billion in crypto-related income from World Liberty Financial and the TRUMP memecoin; Democrats want enforceable divestiture, and Republicans call that a poison pill.
A charter deepens Democratic opposition
On August 14, the Office of the Comptroller of the Currency granted World Liberty Financial a conditional national trust bank charter to issue stablecoins directly — one day before Galaxy cut its odds to 10%. According to crypto.news, Senator Elizabeth Warren called it "the most brazen act of self dealing our financial system has ever seen." Republicans hold 53 seats but are expected to lose two senators on the vote, meaning at least eight Democrats must cross over; only two did so in committee.
Regulators are not waiting
The SEC and CFTC are moving ahead with agency rulemaking that could substitute for legislation, including the SEC's Regulation Crypto package covering token launch exemptions, decentralization safe harbors and broker-dealer custody rules. Unlike a statute, agency rules can be reversed by a future administration — a gap the CLARITY Act was designed to close.
Source: crypto.news
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