The Clarity Act’s prospects of advancing in Congress unraveled Tuesday after Republicans rejected a counterproposal from Senate Democrats, leaving negotiators far apart hours before a pivotal procedural vote.
Senator Cynthia Lummis (R-Wyo.), one of the bill’s lead Republican negotiators, said the Democratic proposal effectively restated the party’s opening position from before the August recess. “Senate Democrats’ counter offer looks identical to their opening position at the start of recess,” Lummis said. “Republicans have moved substantially on every front, including agreeing to nearly all of the Tillis-Gallego ethics framework, while Democrats have not budged an inch.”
She added: “If Democrats are serious about reaching a deal, they need to actually start negotiating instead of resubmitting the same demands and calling it progress.”
Prediction markets priced in the collapse. Polymarket bettors cut the chance of the Clarity Act becoming law this year to 13 percent, down from roughly 30 percent a day earlier. On Kalshi, the contract for a crypto market structure bill becoming law before Oct. 1, 2027, fell to 36 percent from around 53 percent on Monday. Traders also shifted outlooks further out: the chance of passage by Jan. 1, 2028, rose to 51 percent, compared with 53 percent for a deadline before July 1, 2027, on Monday.
The reversal followed a surge of optimism the previous day, when Republican concessions appeared close to breaking a months-long stalemate. That hope faded as banking groups pressed lawmakers to tighten restrictions on stablecoin interest and rewards, and a bipartisan group of state attorneys general warned the legislation could erode states’ ability to police crypto-related fraud.
Republicans released what they called their final draft over the weekend, making more than 100 changes requested by Democrats, including concessions on ethics provisions. The Senate is scheduled to vote Tuesday afternoon on whether to invoke cloture on the motion to proceed, a threshold requiring 60 votes.
