The prospects for the Clarity Act significantly declined on Tuesday after Republicans rejected a counterproposal from Senate Democrats, just hours before a crucial procedural vote.
Senator Cynthia Lummis (R-Wyo.), a prominent Republican negotiator for the bill, stated that the Democrats' proposal showed no substantial changes from their initial stance prior to the August recess.
"Senate Democrats’ counteroffer appears to be identical to their original position at the start of the recess," Lummis expressed in a statement shared with CoinDesk. "Republicans have made considerable concessions across the board, including agreeing to most of the Tillis-Gallego ethics framework, while Democrats have not budged at all."
"If Democrats truly want to strike a deal, they need to engage in real negotiations instead of simply resubmitting the same demands and calling it progress," she added.
Clarity Act's odds of passing this year drop on Polymarket. (Polymarket)According to Polymarket, bettors have reduced the likelihood of the Clarity Act being enacted in 2026 to 14% on Tuesday morning, down from approximately 30% the previous day.
This decline is also reflected on Kalshi, where traders are increasingly pushing potential breakthroughs further into the future. The probability of a crypto market structure bill being passed before October 1, 2027, fell to 36% on Tuesday, a drop from around 53% on Monday morning.
In comparison, on Monday, traders estimated the chances of passage before July 1, 2027, at 53%. By Tuesday, the outlook had shifted, with Kalshi traders assigning a 51% chance for the bill, or another qualifying crypto market structure legislation, to become law only by January 1, 2028.
This reversal follows a surge in prediction markets on Monday, fueled by hopes that Republican concessions could finally resolve the ongoing stalemate. However, that optimism diminished as banking groups urged lawmakers to impose stricter regulations surrounding stablecoin interest and rewards, while a bipartisan group of state attorneys general cautioned that the legislation could undermine states' ability to combat crypto-related fraud.
Over the weekend, Republicans unveiled what they termed their final draft after incorporating over 100 amendments requested by Democrats, including adjustments to ethics provisions. The Senate is slated to vote on Tuesday afternoon to determine whether to invoke cloture on the motion to proceed, which necessitates 60 votes.