Prediction market Polymarket now shows just a 49% chance that the US Clarity Act will be signed into law in 2026, highlighting how investor expectations have cooled as the legislative calendar tightens. What some market participants and industry observers had once viewed as a possible early-July breakthrough has failed to materialize, and the already narrow pre-election window for advancing major crypto legislation is shrinking further.
According to the report, while Senate work can still continue behind the scenes during the summer through negotiations and drafting, House procedures are effectively stalled for now. Senator Bill Hagerty recently said the Senate is expected to release the final text of the Clarity bill soon, giving lawmakers and the digital asset industry a clearer view of the proposal before debate resumes. That release would also help prepare for debate and voting after Congress returns on July 13.
The bill has advanced, but the original timetable has slipped
The Clarity Act of 2025 was introduced in May 2025 by House Financial Services Committee Chairman French Hill. In June, it passed review in both the Financial Services Committee and the Agriculture Committee, and on July 17 it cleared a vote in the full House. The legislation is intended to establish the first comprehensive federal regulatory framework for US digital asset markets, with a central focus on clarifying the line between SEC and CFTC oversight.
The bill reportedly took around 10 months of repeated bipartisan negotiations to reach its current form and spans 309 pages. Its major provisions touch on the SEC-CFTC jurisdictional split, stablecoins, anti-money laundering standards, insider trading, and exemptions for non-controlling developers. On May 14, the Senate Banking Committee approved the legislation by a 15-9 vote, and it was later placed on the Senate legislative calendar.
Even so, the Senate did not schedule a floor vote before the holiday period. Parts of the crypto industry had hoped for action by late June or early July, and some figures tied to the Trump administration had even viewed July 4 as a possible signing target. That benchmark has now passed, underscoring the gap between political momentum and the procedural realities of getting a complex market structure bill over the line.
Three unresolved disputes remain at the center of the debate
The main obstacles now fall into at least three categories: stablecoin yield provisions, liability exemptions for DeFi developers, and broader ethics and enforcement language. Around June 9, bilateral closed-door negotiations reportedly broke down. Participants in the ethics-related talks included Senators Kirsten Gillibrand, Ruben Gallego, Bernie Moreno, and Cynthia Lummis, as well as Patrick Witt, executive director of the White House crypto council.
According to the report, Republicans and the White House withdrew a provision that would have authorized state attorneys general to bring civil suits if the Department of Justice failed to enforce ethics rules. That move split the negotiations and contributed to the inability of Senate leadership to arrange a vote before the holiday recess. Although compromise over stablecoin yield language temporarily eased some friction during the committee stage, the DeFi developer liability safe harbor and unresolved ethics and conflict-of-interest standards continue to weigh on the bill.
The sensitivity of those ethics provisions has been amplified further by disclosure issues surrounding Trump family crypto holdings. Supporters of the legislation argue that the industry needs a predictable and workable federal framework as soon as possible. Critics, or lawmakers still seeking revisions, argue that unresolved conflicts of interest and unclear enforcement boundaries could create new legal and political problems if the bill moves too quickly.
Law-enforcement pressure has eased somewhat, but time is running out
There are, however, some constructive developments. The Major County Sheriffs of America has shifted its stance on the Clarity Act from opposition to neutrality. In a letter to Senate Banking Committee Chairman Tim Scott and Senator Elizabeth Warren, the group said some of its concerns regarding Section 604 had been addressed. That change removes at least one source of institutional resistance, even if it does not resolve the wider political impasse.
Section 604 is centered on limiting liability for developers of decentralized protocols. Supporters say developers should not automatically be treated as intermediaries responsible for user behavior on a protocol. Law-enforcement bodies had previously warned that the section could create regulatory and investigative gaps, making it harder to pursue cases tied to money laundering, ransomware, drug trafficking, and terrorist financing. The sheriffs’ group had earlier argued that the provision might weaken enforcement capacity in crypto-related illicit finance cases.
Hagerty’s comments suggest that a final Senate text could emerge soon, potentially resetting negotiations and giving lawmakers a concrete basis for debate once Congress returns on July 13. But the practical calendar remains tight. With only about three effective working weeks left before the August recess, every delay carries more weight. The next several days and weeks are therefore likely to determine whether the bill still has a viable path this year or is pushed into a later legislative cycle.
What markets and Wall Street are pricing in
Polymarket’s 49% reading suggests that traders are no longer assigning better-than-even odds to the Clarity Act becoming law this year. The market had previously spent extended periods fluctuating around the 60% level, indicating that expectations have softened but not collapsed. In practical terms, participants still see a plausible path to enactment, yet they are pricing in a materially higher probability of delay.
The dynamic reflects a familiar pattern in US crypto policymaking. There can be a broad bipartisan foundation for market structure reform and visible support from parts of the executive branch and industry, but the final stage often turns on details: how powers are divided, how enforcement is preserved, how developers are treated, and how ethics provisions are written. Those issues tend to become most difficult precisely in the final stretch.
Jefferies said that if the bill passes, it could provide a clearer regulatory framework for digital assets and accelerate activity by banks, asset managers, and exchanges in tokenized assets, custody, staking, and lending. The firm also said clearer rules could support additional crypto ETFs and more IPOs from crypto infrastructure companies. If legislation is delayed, by contrast, regulatory uncertainty would persist longer and could slow blockchain-related plans at traditional financial institutions.
Jefferies added that the legislative process itself is likely to continue influencing the performance of crypto-linked equities such as Circle, Coinbase, and Bullish, as well as parts of the broader digital asset market. At the same time, the bank noted that over the longer term, Circle’s biggest challenge may not be regulation alone. Competitive pressure from banks, fintech firms, and payment companies could ultimately prove even more significant for stablecoin issuers.