Republicans push back on Democrats’ CLARITY Act counteroffer as passage odds plunge

US Senate Republicans turned down a Democratic counteroffer on the CLARITY Act on Tuesday, leaving the bill’s path to passage in greater doubt ahead of an afternoon procedural vote to begin floor debate, according to reporting from Punchbowl News.

Republicans’ revised CLARITY Act text, released late Sunday, prompted Democrats to send a counterproposal Monday night seeking stronger ethics restrictions, changes to decentralized finance policy, and additional safeguards.

Democrats said the GOP ethics provision falls short because it does not require President Trump to divest from his crypto businesses and relies on enforcement mechanisms they view as insufficient.

Sen. Cynthia Lummis, one of the bill’s leading Republican negotiators, said Democrats “have not budged an inch,” arguing that their latest proposal closely mirrors the position they held before the August recess. She said Democrats needed to negotiate rather than repeat previous demands.

The standoff quickly weighed on prediction markets, with Polymarket putting the probability of the CLARITY Act becoming law in 2026 at 14% Tuesday morning, down from roughly 30% 24 hours earlier.

Kalshi traders also became less confident in near-term passage, cutting the odds of a crypto market structure bill becoming law before Oct. 1, 2027, to 36% from 53% on Monday.

The shift came after optimism over Republican concessions faded as banks pushed for tighter restrictions on stablecoin rewards and interest payments, while a bipartisan group of state attorneys general warned that the bill could limit states’ ability to address crypto-related fraud.