CLARITY Act Stalls as 78% Government Shutdown Odds Loom Over Funding Deadlock

Washington gridlock just threw crypto regulation into the deep freeze. With the odds of a federal shutdown now hitting a staggering 78%, the landmark CLARITY Act—the legislation meant to finally draw clear lines for digital assets—is officially in legislative limbo.

The Funding Impasse That Changes Everything

No budget, no progress. It's that simple. The political standoff over government funding has effectively sidelined all non-essential legislative work. For the crypto industry, that means the crucial framework promised by the CLARITY Act is now on indefinite hold. The 78% probability isn't just a number—it's a countdown to regulatory paralysis.

Why This Freeze Matters for Your Portfolio

Markets hate uncertainty more than they hate bad news. The CLARITY Act was supposed to be the antidote, providing the rules of the road for exchanges, stablecoins, and token classification. Its delay perpetuates the same ambiguous environment that has kept institutional capital on the sidelines. It’s the regulatory equivalent of watching paint dry—only your portfolio's growth is stuck waiting with it.

Between political theater and actual governance, Washington seems to have forgotten there's a multi-trillion-dollar digital economy waiting for permission to innovate. The shutdown odds tell the real story: when it comes to modernizing finance, the old system would rather grind to a halt than step into the future.

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. 

Get seen where it counts. Advertise in Cryptopolitan Research and reach crypto’s sharpest investors and builders.