Polymarket Traders Cut Clarity Act Passage Odds to Record Low

The U.S. CLARITY Act would shape stablecoin rewards and the regulatory framework for digital assets. If an exemption for retail users is retained, ordinary consumers could continue receiving stablecoin rewards. The provision is particularly important to Coinbase, which relies on related yield-based business and could see an impact on its core revenue and the competitiveness of the U.S. crypto industry.

Polymarket at one point put the probability of the CLARITY Act passing in 2026 at 70%, offering a glimmer of hope in Coinbase’s effort to protect its revenue. The latest market odds, however, have fallen to 38%. With only 28 days remaining until a key deadline at the end of May 2026, the bill may struggle to become law this year unless Congress advances it in time.

The CLARITY Act is designed to establish a US market structure for digital assets and clarify the respective roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission. Its progress is closely watched by crypto exchanges, token issuers and traditional financial institutions because it could shape compliance requirements and determine how digital assets are regulated across federal agencies.

The Solana Policy Institute’s chief executive said the bill was stuck in “August recess purgatory” and assigned it only a 10% chance of passage before the November 2026 midterm elections. That assessment is more pessimistic than pricing on prediction markets including Polymarket and Kalshi, reflecting mounting concern that traditional institutions’ involvement and election-year politics have made a congressional agreement substantially harder to reach.

The Digital Asset Market Clarity Act would establish a federal market structure for the roughly $2.3 trillion cryptocurrency sector, defining when tokens fall under the Commodity Futures Trading Commission or the Securities and Exchange Commission. The House passed H.R. 3633 by 294-134 on July 17, 2025, but Senate negotiations stalled over safeguards aimed at preventing elected officials, including President Donald Trump, from profiting from crypto interests while in office.

Senate Republicans released what they called their final draft late on Sept. 13, incorporating 126 substantive changes sought by Democrats. Polymarket’s implied chance of enactment in 2026 rose to about 32% from 22%, on more than $16 million in trading volume, while Kalshi’s odds jumped to 44% from 18%. A Sept. 15 cloture vote needs 60 senators; Republicans hold 53 seats. Even if debate begins, the bill still faces amendments, final passage and House approval of the Senate text.