Negotiations in the U.S. Senate regarding the Cryptocurrency Market Structure Act Clarity Act have once again stalled ahead of a key procedural vote. After Republicans rejected the Democrats' latest counterproposal, markets quickly reduced the likelihood of the act advancing in the short term, as there are still significant differences between the two parties on core provisions.
The Republican Party rejects the counterproposal.
The Republican senator participating in the negotiations, Cynthia Lummis, stated that the Democrats' latest proposal hardly differs from their initial stance before the recess. She mentioned that the Republicans had already made concessions on several matters, including agreeing to most of the arrangements within a moral standard framework close to Tillis-Gallego, but the Democrats did not significantly adjust their demands.
According to the current schedule, the Senate will vote on Tuesday afternoon regarding "whether to end the debate and proceed to the next stage," which means a vote will be taken on the procedural motion to advance the bill. This procedure requires 60 votes in support.
Predicts a downward adjustment in market expectations
After negotiations were hindered, the forecast market quickly adjusted its pricing:
- Polymarket, the likelihood of legislation for Act 2026 dropping to about 13% within 2026
- This figure has significantly dropped compared to the level of about 30% from the previous day.
- Kalshi, the probability of implementation before October 1, 2027 has dropped to 36%.
The trades related to Kalshi also show that the market is continuing to push back the possible time of a breakthrough. On Tuesday, traders estimated that the probability of legislation being completed by January 1, 2028 was about 51%, indicating that confidence in reaching an agreement in the short term is waning.
External pressure continues to increase.
Just the day before, there was a moment in the market where expectations for the advancement of the bill increased due to Republican concessions, suggesting that the deadlock that had lasted for months might be breaking down. However, this sentiment quickly faded.
On one hand, banking groups are calling on lawmakers to further tighten restrictions on stablecoin interest rates and incentives. On the other hand, a group composed of attorneys general from both parties warns that such legislation could weaken states' ability to enforce laws against crypto fraud. These factors make it more difficult to reach an agreement in the negotiations.
The Republican Party claims to have made over 100 changes.
The Republican side released what it called the final draft over the weekend, stating that they had made over 100 revisions to the content at the request of the Democratic Party, including adjustments to the ethics provisions. However, based on the current statements from both sides, these modifications are still not sufficient to win the support of the Democratic Party.
If the procedural vote on Tuesday fails to exceed the 60-vote threshold, the advancement of Clarity Act may continue to slow down, and the legislation regarding the structure of the US cryptocurrency market will face further delays.
