The likelihood that the CLARITY Act would become law has surged to approximately 68%, reflecting growing confidence that the United States might finally put clearer rules on crypto in place.
But along with that optimism stands a caveat: political shifts in Washington, particularly whichever party controls the Senate, could still prolong the situation, or even sink the bill.
The legislation, designed to create a comprehensive regulatory framework for digital assets, has gained traction after months of stalled Senate negotiations.
Market sentiment has improved following a series of compromises on key sticking points—particularly around stablecoin rules and regulatory jurisdiction between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The urgency to advance the CLARITY Act has increased, given a potential shift in power in the U.S. Senate. Alex Thorn said the race for Senate control is very tight, and that could have a direct impact on crypto regulation.
One of the biggest agencies responsible for shaping financial legislation, the Senate Banking Committee, may be chaired by Democrats or Republicans, depending on how the elections unfold, he said. If the Democrats assume control, several politicians could serve as chairmen of the committee, including Sherrod Brown or Elizabeth Warren.
That is crucial because Warren has long been critical of cryptocurrencies. Analysts say that if she steps into control, the CLARITY Act could take a back seat or face stiff resistance. As it stands now, prediction markets such as Polymarket conclude the Senate race is nearly 50-50.
It’s precisely that uncertainty that prompts some lawmakers to push for the bill to be advanced quickly. Among those advocating for action is Republican Senator Thom Tillis, who says the bill should be sent for markup as soon as Congress returns from its May recess.
Why is the risk of approval on the way up?
Given the political risks, however, confidence in the CLARITY Act has been boosting. A recent rise (around 68%) in the approval odds settled at around 63% to 65% on Polymarket. That’s the highest reading in weeks.
One major reason for this increase is advancement inside the Senate Banking Committee, chaired by Tim Scott. He just said the bill had reached what lawmakers refer to as the “red zone,” a stage of critical review called markup.
This stage should occur by May 2026. Another breakthrough was around a compromise on stablecoin rules, and particularly regarding how yields (returns) on those digital assets should be managed.
This issue had previously slowed negotiations. The lawmakers found a middle ground and began to cover some of the gaps that had stymied progress. The agreement also aligns with previous initiatives, including the GENIUS Act, to create a more harmonized framework for digital asset regulation.
What if Washington changes course?
The big question now is whether political shifts will turn that around. The CLARITY Act is already moving forward with bipartisan support and has passed the House of Representatives, showing momentum.
But the Senate has been more divided, primarily on how narrowly to regulate crypto. If Republicans retain enough sway, supporters say the bill could proceed more easily. Senator Tim Scott is apparently seeking all Republican support before engaging Democrats in any further talks.
But if Democrats come to power, particularly if the government leans toward cautious voices on cryptocurrencies, things could slow dramatically.
In that scenario, even a bill with strong momentum could be delayed or rewritten. The CLARITY Act matters because it would help regulate cryptocurrencies in the U.S., a goal the industry sought for many years.
Currently, companies struggle to understand whether they are subject to securities law, commodities law, or other legislation.
A working CLARITY Act could establish clearer rules, enabling easier business with crypto and clearer user understanding of the risks. It also allows the U.S. to remain more competitive as other parts of the world advance their own crypto regulations.