John Thun breaks hopes of voting on CLARITY bill before recess

Senate Majority Leader John Thune ruled out passing the CLARITY Act before the August recess, and Polymarket traders lowered the probability of the bill becoming law in 2026 to 33%.

Summary of Points

John Thune said that the CLARITY Act will not be passed before the Senate recess in August. Ron Hammond pointed out that electoral politics is drowning out bipartisan support for the bill. Polymarket traders currently put a 33% chance of the CLARITY Act being passed in 2026.

According to a report on July 24, Thun expects that the Senate will not approve the cryptocurrency market structure bill until lawmakers leave Washington, breaking what industry supporters previously regarded as a key deadline for passing the bill this year. The focus has now shifted to the short window after the November midterm elections, when Congress will face competition for time on government funding measures, defense legislation and other unfinished matters when it resumes. Ron Hammond, Wintermute's director of policy and advocacy, said the bill still has enough bipartisan support but has fallen into an election-year controversy.

Hammond believes that the current core issue has shifted from a lack of votes in the Senate to a political game. As Democrats prepare to launch a campaign campaign against President Donald Trump and his alleged corruption issues, he expects some lawmakers to avoid supporting important cryptocurrency bills before the election vote. "There are enough votes, but election politics is louder. The latter will dissipate after November, a narrow but highly likely window period,"Hammond said.

Electoral politics becomes the main obstacle

The controversy over Trump's cryptocurrency business has complicated negotiations, even as Republicans have said they will consider restricting the digital asset activities of elected officials. Senate Democrats are calling for additional provisions to prevent senior government figures from using public office to profit from cryptocurrency projects. According to the latest draft, ethical restrictions involving Trump and other federal officials will be enforced by the Justice Department. Some Democratic lawmakers rejected the plan, arguing that the department is part of the executive branch and should not have sole enforcement power over the current president.

According to a report on July 23, seven Senate Democrats opposed the updated bill text due to ethics, consumer protection and enforcement issues. Republicans hold 53 Senate seats and need at least 7 Democratic support to reach the 60 votes typically needed to advance the bill. Senate Minority Leader Chuck Schumer encouraged Democrats to focus their midterm campaign platform on Trump's alleged corruption. Hammond believes the strategy could make Democratic senators reluctant to provide the government with a legislative victory until November, even if they support federal cryptocurrency regulatory rules in principle.

Banking groups added another layer of resistance by opposing clauses that would allow rewards for holding stablecoins. The associations warn that such products could draw customer deposits away from traditional banks and reduce the amount of money available for lending. Hammond pointed out that banks and other opponents used extended negotiations to push the bill past important deadlines. Their lobbying activities have perpetuated disputes over stablecoin rewards, regulatory authority and ethical controls, while the remaining Senate agenda has shrunk.

However, Goldman Sachs CEO David Solomon has distanced himself from the banking lobby that seeks stricter restrictions. According to reports, Solomon is "very supportive" of advancing the bill, arguing that it will establish a structure for the U.S. cryptocurrency market and provide clearer operating rules for digital asset companies. While acknowledging that members can still debate parts of the proposal, Solomon believes Congress should not give up completely because the framework is not perfect. He believed the legislation would help maintain market stability and subject companies to more consistent rules, but did not explicitly support the controversial stablecoin reward terms.

Pass probability reduced to 33%

Despite the shrinking timetable, cryptocurrency executives continue to urge Congress to take action. Ripple CEO Brad Garlinhouse supported the view of company chief legal officer Stuart Aldrotti, who urged lawmakers not to abandon a viable bill in the process of seeking a perfect compromise. According to sources, Coinbase CEO Brian Armstrong also believes that after months of negotiations, the bipartisan proposal is ready for consideration by the Senate. However, the calls did not lead to voting arrangements, and Thun's assessment showed that the Senate would enter recess without resolving remaining disputes.

Traders in the forecast market further lowered expectations. Polymarket currently shows a 33% chance that the CLARITY Act will become law in 2026, with more than $2.56 million in bets on the contract. Polymarket's chart shows that the probability climbed to more than 80% in late February and continued to decline in subsequent months. As ethical disputes, bank opposition and an approaching recess eroded market confidence, the probability in July had dropped to around 30%. Hammond predicts that when lawmakers resume after the election, campaign pressure may ease, creating a short window for restarting negotiations. But the effort will still compete for time with funding deadlines and defense legislation, leaving senators limited time to resolve ethics, banking and law enforcement disputes.