CLARITY Act Odds Plummet as Senate Vote Looms
The odds of the CLARITY Act becoming law by 2026 have significantly decreased, standing at just 25% on September 13, a sharp drop from 82% in February. Concurrently, a separate market on the prediction platform Kalshi indicated a 94% probability of a U.S. Senate vote on the measure before October 1.
This divergence highlights two critical junctures: first, whether the Senate will even consider the legislation, and second, whether it will successfully navigate the full legislative process to be enacted into law – a development many believe is crucial for a potential cryptocurrency bull market.
Senate Set for Procedural Vote
The Senate is scheduled to consider the measure on September 15. The Kalshi market’s concern is focused on whether H.R. 3633, previously known as the CLARITY Act, will be passed by both chambers of Congress and signed into law by December 31, 2026. A vote on the motion to proceed represents an earlier procedural step, distinct from final enactment.
More than $8 million has been wagered on Kalshi’s contract related to the bill’s enactment. The market’s implied probability for this outcome fell from 82% in February to 16% by September 7.
Divergent Projections for Passage
Estimates regarding the Senate’s threshold for passage vary. Coinbase CEO Brian Armstrong expressed optimism in a CNBC interview, suggesting he was confident about securing the necessary 60 votes and characterizing the negotiations as largely successful in meeting the demands of both sides.
However, other assessments have been more cautious. Ian Katz of Capital Alpha Partners revised his estimate of the bill’s chances of passage downward from approximately 40% to 25%. Galaxy Digital’s August estimate stood at a mere 10%. These projections, much like the prediction market prices, address the prospects for legislation that must overcome a procedural Senate vote before advancing further.
Key Senate Vote Approaches
In related CLARITY Act news, the September 15 vote is expected to focus on a motion to proceed, a procedural step that would authorize debate on the bill rather than passing it outright. Supporters require 60 favorable votes to advance. With Republicans holding 53 Senate seats, at least seven Democrats would need to join them to overcome a potential filibuster.
The CLARITY Act previously passed the House of Representatives in July 2025 by a vote of 294-134. The bill aims to establish a federal regulatory framework for the U.S. cryptocurrency market.
Contentious Issues Remain
Under the proposal, the Commodity Futures Trading Commission (CFTC) would be granted exclusive authority over spot markets for digital commodities, while the Securities and Exchange Commission (SEC) would retain oversight of certain securities offerings and crypto exchange activities.
However, three key areas of disagreement persist. A contingent of Democrats, including Senator Kirsten Gillibrand, are advocating for a binding ban on public officials holding cryptocurrency assets. Traditional banking institutions have also resisted compromise on issues related to stablecoin rewards. Furthermore, lawmakers remain divided over protections for decentralized finance (DeFi) protocols and non-custodial software developers, with concerns that certain language could inadvertently create regulatory loopholes.
The Path Forward
If the motion to proceed garners the necessary votes, the legislation would advance to formal debate. The outstanding disagreements concerning ethics, stablecoin rewards, and protections for DeFi and non-custodial developers would still need to be resolved. Failure to achieve cloture would halt the bill’s progress at this procedural stage.
It is important to note that the legislative route is not the sole avenue for cryptocurrency policy. The SEC and CFTC are actively pursuing regulatory measures without waiting for congressional action. Under the leadership of Paul Atkins, the SEC has reportedly abandoned certain enforcement actions and outlined a taxonomy of crypto assets. The CFTC is also addressing issues related to leveraged exchanges and DeFi.
While regulatory action can establish a framework outside of legislation, agency rules are also subject to change by future administrations. Therefore, the September 15 proceeding remains a significant indicator of whether the CLARITY Act can initiate Senate debate, while prediction markets underscore the separate challenge of its potential enactment into law by 2026.
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