Polymarket users are currently predicting that the U.S. government may shut down again before the end of January with a 77% chance, which is an increase of 67% in the last 24 hours. This new development creates uncertainty for the new cryptocurrency rules provided by the CLARITY Act.
The CLARITY Act was subject to many setbacks; however, lawmakers pointed out that one of the main reasons for this delay was last October’s shutdown of the US government for 43 days. Currently, growing tensions between US politicians are affecting the pace at which this bill is moving forward.
In a post on X (formerly Twitter) on Saturday, Collin Rugg, a political commentator, mentioned the jump in Polymarket odds. The jump came after Senate Majority Leader Chuck Schumer said that Senate Democrats will vote against an appropriations bill if it includes funding for the Department of Homeland Security (DHS).
“What’s happening in Minnesota is appalling and unacceptable in any American city,” Schumer said, referring to reports of a 37-year-old man being fatally shot by federal agents in Minneapolis early Saturday morning. He said, “This funding package for DHS is woefully inadequate to rein in the abuses of ICE, and I’m going to oppose it.”
Meanwhile, US President Donald Trump has stated that another shutdown is still possible. While speaking with Fox Business on Thursday, President Trump stated, “I think we have a problem, because I think we’re probably going to end up in another Democrat shutdown.”
The prospect of a shutdown has reignited concerns regarding the timing of the CLARITY Act. Coinbase CEO Brian Armstrong and others have been vocal with their disapproval. Armstrong said of the draft, “It is materially worse than the current status quo. We’d rather have no bill than a bad bill. Hopefully, we can all get to a better draft.”
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Galaxy Digital’s research head, Alex Thorn, also highlighted the uncertainty in the regulation of stablecoins. There is also a warning from the US banking sector’s lobbying group that certain aspects may negatively impact the sector’s competitiveness.
“There aren’t clear signs of a compromise to move the bill forward,” Alex Thorn explained. “The next four to six weeks may allow lawmakers to work out these issues and see if progress on stalled stablecoin rule talks can lead to a bipartisan outcome.”
Meanwhile, Congress’s challenges are closely monitored by the cryptocurrency space. The gridlock that Congress faces means that it may be weeks or months before a version of the CLARITY Act emerges.
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