While the ethics fight dominates headlines, the bill also faces pressure from the banking industry. Seventy-eight banking groups, led by the American Bankers Association and the Independent Community Bankers of America, have urged Senate leaders to amend stablecoin yield provisions in Section 404. They argue the current language is too ambiguous and could allow stablecoins to function as deposit substitutes, risking a deposit flight from community banks.
Despite the headwinds, the crypto industry has rallied behind the latest draft. Coinbase vice chair Ryan VanGrack told CNBC that Democrats had secured stronger consumer protections during closed-door negotiations, giving the legislation “more teeth.” He did not provide details but said the changes address gaps in the current U.S. framework for digital asset businesses and their customers. Coinbase had opposed an earlier Senate draft at the start of the year.
Prediction markets reflect the uncertainty. Polymarket traders have lowered the CLARITY Act’s probability of becoming law in 2026 to 31%, down from earlier levels. The odds capture the market’s assessment that the ethics dispute and the narrowing legislative calendar could derail the bill.
A new draft of the bill has begun circulating, and it includes a temporary ethics provision that would sunset in 2029. The draft also requires regulators to implement rules within a year of enactment. However, Democratic lawmakers had not yet seen the text as of Wednesday, and the Senate has only days remaining to act before the summer recess.