Heightened Risk of U.S. Government Shutdown as CLARITY Act Stalls

Increased Shutdown Probability Amid CLARITY Act Review

The CLARITY Act remains a critical focus in Congress, with prediction markets now suggesting a 79% chance of another U.S. government shutdown. This sharp increase follows comments from President Donald Trump during a Fox Business interview and ongoing legislative hurdles.

Stagnant Budget Talks

According to Polymarket, the likelihood of a shutdown by January's end has surged by 69% in the last day due to stalled budget discussions. These delays could significantly impact the legislative timeline for the CLARITY Act.

Political Reactions and DHS Criticism

Senate Majority Leader Chuck Schumer has expressed opposition to the current appropriations bill, particularly over funding for the Department of Homeland Security (DHS). He criticized the bill as "woefully inadequate" in addressing issues within the Immigration and Customs Enforcement department, highlighting a recent incident involving federal agents in Minneapolis.

Implications for the Crypto Industry

The CLARITY Act's progress has been hampered by previous government shutdowns, with the most recent lasting 43 days. Coinbase CEO Brian Armstrong has withdrawn support for the current draft, citing concerns over its quality. Meanwhile, Alex Thorn of Galaxy Digital notes uncertainty around stablecoin yields, which face opposition from U.S. banking groups. The ongoing delays give lawmakers additional time to reach a compromise.

As the political landscape continues to evolve, market participants remain cautious, with Bitcoin prices reflecting the tension. In related news, President Trump has threatened tariffs against Canada, which could further complicate trade dynamics.