CLARITY Act in limbo as US government shutdown odds hit 78% over funding impasse

Traders on Polymarket bet that there is a 78% chance the US government will consider another shutdown by January 31, a 50% increase over the past 24 hours. 

As the calendar nears the January 30 funding deadline, decentralized bettors are pushing the likelihood of a shutdown to levels not seen in recent months, with trading jumping dramatically. That reflects a continued stalemate in Congress over federal spending bills and mounting tensions ahead of funding negotiations.

This estimate was made at a time when the CLARITY Act, a proposed United States federal bill to create a comprehensive regulatory framework for digital assets, was advancing in Congress.

The previous delays stemmed mainly from the record 43-day US government shutdown that occurred in two consecutive months: October and November.

US citizens raise concerns about the possibility of another shutdown this month

Collin Rugg, a prominent conservative political commentator and influencer with a massive following of 1.8 million on the social media platform X, shared a post dated Saturday, January 24.

Rugg said this increase came after United States Senate Minority Leader Chuck Schumer stated that Senate Democrats would not support advancing the appropriations bill if it included funding for the Department of Homeland Security (DHS).

On January 24, federal agents shot and killed a 37-year-old man in Minneapolis, the largest city in Minnesota, during a federal law-enforcement operation tied to immigration enforcement, drawing protests and public outrage. Schumer described the recent events in Minnesota as “horrific” and said such conditions were unacceptable in any American city.

Schumer argued that the DHS funding bill does not do enough to address alleged abuses by Immigration and Customs Enforcement and reaffirmed that he would oppose the legislation without reforms.

In the meantime, individuals raised heightened concerns about another government shutdown when US President Donald Trump acknowledged that another shutdown was still possible during an interview. Following his statement, Trump expressed his belief that there is an issue, given the high likelihood that the United States might face another Democrat shutdown.

This situation has created mounting uncertainty about the CLARITY Act’s timeline, sparking heated debate within the crypto community. Meanwhile, it is worth noting that this mixed reaction emerged shortly after Coinbase CEO Brian Armstrong and other industry executives withdrew their backing.

Armstrong shared his concerns in an X post dated January 15, stating that, “This version would be significantly worse than what we currently have. We’d rather have no bill than a bad bill. Hopefully, we can all work towards a better draft.” 

Industry executives withdraw their backing for the crypto market-structure bill

Apart from Armstrong, Alex Thorn, head of research at Galaxy Digital, released a report recently expressing similar concerns. According to him, there is significant doubt about stablecoin yields, which the US banking lobby alleged may hinder banks’ ability to compete.

To further break this point down for better understanding, Thorn stated that, “There aren’t any strong signs yet that both sides have found a compromise to improve the bill’s chances.” He added that “the extra 4-6 weeks before a second markup attempt should give everyone more time to collaborate on this.”

Afterwards, Thorn raised an important question asking whether talks about stablecoin rewards can proceed during this time to foster a successful bipartisan markup. 

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