Prediction market platform Kalshi showed the probability of the CLARITY Act passing before 2027 falling from nearly 75% to 50% in the span of a week, reflecting sharply declining odds for the crypto market-structure bill. The drop in recent days signals growing uncertainty over the legislation's path through Congress, even after the Senate Banking Committee voted 15-9 to advance the bill earlier this month. Traders cited a crowded Senate calendar, unresolved disputes over yield-bearing stablecoins, and continued resistance from banking interests as major obstacles to the bill's progress.
The CLARITY Act seeks to establish a federal framework for regulating digital assets and clarify the respective roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission. The legislation is viewed as one of the most significant crypto-regulation efforts undertaken by Congress and follows years of debate over how cryptocurrencies should be classified and supervised.
Stablecoin Yield Dispute
A central sticking point remains the treatment of yield-bearing stablecoins. The debate has pitted crypto companies seeking flexibility in offering rewards programs against banks that argue such products could compete directly with traditional deposits.
The issue has been at the center of negotiations for months. In March, CoinDesk reported that lawmakers were attempting to break a legislative deadlock through a compromise on stablecoin yield provisions after disagreements delayed progress on the bill.
More recently, Bloomberg reported that banking groups were pushing for last-minute changes to a compromise crafted by Senators Thom Tillis and Angela Alsobrooks regarding stablecoin rewards. Banks continued to press lawmakers to tighten restrictions on products that could resemble interest-bearing deposit accounts.
Current Legislative Draft
The latest Senate draft reflects ongoing negotiations. According to CoinDesk, the legislation would prohibit interest or yield paid solely for holding payment stablecoins while allowing certain transaction-based rewards programs to continue under specific circumstances.
Banking Industry Position
Banking industry concerns have been echoed publicly by major financial institutions. JPMorgan Chase Chief Financial Officer Jeremy Barnum raised concerns about allowing stablecoins such as USDC to generate yield for holders, reflecting broader industry arguments that such products could disrupt traditional banking models.
Supporter Advocacy
Despite growing skepticism in prediction markets, supporters of the legislation continue to argue that momentum remains intact. Senator Cynthia Lummis, one of the most prominent advocates of digital asset legislation in Congress, has continued to push for passage of the bill.
