The chances of the CLARITY Act passing into law in 2026 continue to erode. On prediction market Polymarket, the probability of the bill’s passage has plunged from 40% to 31%, nearing its lowest level since the betting market opened. The sharp decline was triggered by the White House withholding approval on ethics language as of July 20, despite Donald Trump meeting with Republican senators just last week.
This behind-the-scenes impasse centers on the president’s digital asset holdings. According to his financial disclosure report last year, Trump’s earnings from digital assets surpassed $1.4 billion. Democrats have used this figure to demand strict restrictions on elected officials involved in the digital asset industry, directly targeting Trump’s crypto interests. Senator Elizabeth Warren has even demanded that Trump’s updated financial details be submitted before the Senate moves forward with ethics guidelines.
Deadlocked Negotiations Without Clear Guidance
The administration has yet to clarify which ethics boundaries it is willing to accept, leaving negotiators without clear direction. The situation is further compounded by Democrats stating they were intentionally excluded from the latest round of negotiations, including a closed-door meeting between White House representatives and Republican senators.
Senate Majority Leader John Thune is still targeting a vote before August, though he acknowledged that no bipartisan agreement has been reached. The legislative calendar is narrowing rapidly ahead of the August recess. Under Senate rules, Republicans cannot advance the draft alone - they need Democratic support to overcome procedural hurdles.
The Fate of DeFi Protections Also at Stake
While the House of Representatives has passed its version, the Senate must draft and pass its own text before the bill can reach Trump’s desk. Embedded within the bill is the Blockchain Regulatory Certainty Act (BRCA) provision, which has sparked a separate debate. The BRCA rule is designed to protect DeFi developers from being classified as money transmitters. However, this protection clause has faced strong pushback from law enforcement agencies.
Despite the opposition, Blockchain Association CEO Summer Mersinger maintains that the BRCA protections will survive. Mersinger even projected that a Senate floor vote could take place this week, a forecast sharply at odds with the pessimistic sentiment on Polymarket.
The window is now rapidly closing for the Senate to finalize the bill before the recess. For crypto industry players who have long awaited regulatory clarity, this delay sends a clear message: the legal fate of digital assets is often determined not by arguments of technological innovation, but held hostage by conflicts of interest and the financial stakes of lawmakers.
Reported by crypto.news.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
