CLARITY Act Passage Before Election Unlikely, Odds at 33%

Headline: Thune Kills Hopes for CLARITY Act Before Recess — Passage Now a Post‑Election Long Shot Senate Majority Leader John Thune has all but ruled out a vote on the bipartisan CLARITY Act before Congress breaks for its August recess, dealing a major blow to industry hopes for a pre‑election win on federal crypto rules. Fortune reported Thune’s decision on July 24, and prediction markets quickly reacted: Polymarket now pegs the bill’s chance of becoming law in 2026 at about 33%, with more than $2.56 million wagered on the contract. Why the timetable matters With the August deadline gone, attention has shifted to the brief window after the November midterms when Congress returns to handle government funding, defense bills and unfinished business. That period may offer the clearest — if still narrow — opportunity to revive negotiations, but competing priorities will squeeze floor time for any crypto legislation. What’s blocking the CLARITY Act Industry insiders and lawmakers say the bill still has bipartisan support, but several political and policy disputes have stalled progress: - Election politics: Ron Hammond of Wintermute told Fortune that votes exist, but “election messaging” is louder. Democrats focused on campaigning against President Trump and alleging corruption may be reluctant to hand the administration a legislative victory before voters go to the polls. - Ethics and Trump’s crypto ties: Negotiators inserted ethics restrictions tied to Trump and other senior officials that would be enforced by the Department of Justice. Several Democrats oppose funneling sole enforcement power through the DOJ because it sits in the executive branch and could be problematic for holding a sitting president accountable. - Democratic resistance: According to crypto.news, seven Senate Democrats oppose the updated text on ethics, consumer protection and enforcement grounds. With Republicans holding 53 seats, the bill would still need at least seven Democrats to reach the 60 votes typically required to advance legislation. - Banking opposition: Banking groups have pushed back against provisions that could allow rewards on stablecoin holdings, arguing such products would siphon deposits from traditional banks and reduce lending capacity. - Negotiation fatigue: Extended talks have allowed opponents to keep disputes — over stablecoin rewards, regulatory authority, and ethics enforcement — alive as the Senate calendar shrinks. Industry pressure and mixed business support Crypto executives have publicly urged Congress not to abandon the bill. Ripple CEO Brad Garlinghouse and Coinbase CEO Brian Armstrong have both called for action, while Ripple’s chief legal officer warned lawmakers against holding out for a perfect compromise. Some financial industry leaders diverge from trade associations: Goldman Sachs CEO David Solomon reportedly supports advancing the bill to create a U.S. market structure and clearer rules for digital-asset firms, even if parts of the text remain imperfect. Polymarket reaction and odds Polymarket’s market shows the CLARITY Act’s perceived chances peaked above 80% in late February, then steadily declined as disputes intensified and the recess approached. By July the probability slipped toward the low 30% range; the site now prices the legislation at roughly a one‑in‑three shot of becoming law in 2026. Outlook Many in the industry still see a “narrow but possible” window after November when campaign pressure eases and lawmakers can resume bargaining. But there will be stiff competition for time on the Senate floor — from funding deadlines to defense bills — leaving limited opportunity to resolve the remaining ethics, banking and enforcement disagreements before a final vote.