Momentum behind the US CLARITY Act appears to be fading as political and ethics concerns collide with a potential Senate push. Polymarket places the odds of the bill passing this year at about 40%, citing objections from Democratic lawmakers and raising the possibility that the ethics controversy could derail broader bipartisan work.
Beyond Washington, crypto’s second quarter showed a split: mainstream trading activity continued to contract, while prediction markets hit record volumes. At the same time, France moved to block Polymarket, underscoring how regulation is shaping where and how prediction markets can operate.
Key takeaways
- Polymarket estimates roughly a 40% chance that the CLARITY Act clears the Senate this year.
- Senate Majority Leader John Thune said a vote will be held before Aug. 10, but ethics-related disputes are complicating Democratic support.
- CoinGecko’s Crypto Industry Report shows spot trading on the top 10 centralized exchanges fell from $2.7T in Q1 to $1.95T in Q2.
- Prediction markets bucked the trend, reaching $113.8B in notional volume in Q2, while France’s gambling regulator ordered Polymarket access blocked.
- Tokenized stocks recorded a new high at $2.3B in global market cap, led by Ethereum (34%) and BNB Chain (30%).
CLARITY Act vote faces an ethics-driven test
Several Democrats have signaled resistance to the CLARITY Act, according to Cointelegraph’s earlier reporting on Senate opposition from lawmakers including Chris Murphy, Jeff Merkley and Chris Van Hollen (see linked coverage). The concern centers on how the bill intersects with the politics of crypto advocacy and potential conflicts of interest.
Cointelegraph reports that Senate Majority Leader John Thune indicated a crucial vote could happen as early as this week and would definitely take place before Aug. 10. But the political calendar alone may not be enough: Democrat Senator Elizabeth Warren is attempting to “spoil the vote” by spotlighting alleged links between President Donald Trump and crypto profits, Cointelegraph says.
Warren’s push builds on claims that Trump earned more than $1 billion from crypto last year, based on a 2025 disclosure. Cointelegraph also notes that this is why Senate Democrats may be unwilling to support the bill unless it includes language barring elected officials from promoting or issuing cryptocurrency.
“Ethics is the big elephant in the room.”
The quote is attributed to Summer Mersinger, CEO of the Blockchain Association and a former commissioner at the US Commodity Futures Trading Commission, in Cointelegraph’s linked coverage (see linked coverage).
“For my members and what we are advocating for on the Hill… look, whatever you decide on ethics, that’s really not our concern. That is politics. That’s Congress. That’s elected officials. But please don’t let it kill all the hard work that we put in the rest of the bill.”
For investors and builders, the practical risk is straightforward: even if the CLARITY Act advances on substantive market-structure provisions, passage could hinge on whether lawmakers accept ethics guardrails that satisfy Democratic conditions. Readers should watch whether negotiators offer a specific ban on officials’ crypto activity—or whether the bill’s schedule slips despite Thune’s stated timeline.
Q2 revealed a divergence: spot weakness, prediction market strength
Crypto markets were weak in Q2 overall, but prediction markets stood out as an exception. CoinGecko’s Crypto Industry Report, cited by Cointelegraph, shows spot trading volume across the top 10 centralized exchanges dropped from $2.7 trillion in Q1 to $1.95 trillion in Q2.
Derivatives also softened. CoinGecko data cited in the report indicates CEX perps volume declined 10% to $12.7 trillion, while the stablecoin market fell 1.6% to $305.1 billion.
Against that backdrop, prediction markets recorded their strongest quarter on record, reaching $113.8 billion in notional volume. Cointelegraph links that performance to Polymarket’s specific categories as well: the platform’s World Cup winner market has attracted more than $3.3 billion in trading volume, and contracts tied to the 2028 US presidential election rank among the platform’s largest markets, according to Polymarketscan data (polymarketscan).
France blocks Polymarket as regulation tightens
While prediction markets appear to be drawing record engagement, regulatory actions are limiting access. Cointelegraph reports that France’s National Gambling Authority ordered internet service providers to block access to Polymarket after concluding that prediction markets may fall under illegal gambling.
The report adds that Polymarket is blocked in 33 countries, while users can still often access via tools such as VPNs—an important reminder that enforcement patterns can vary and that compliance risk can shift as regulators act.
For market participants, the implication is that prediction-market growth may be constrained not only by liquidity and user demand, but by whether regulators treat the platform as a sportsbook, a financial product, or something in between. Upcoming legal clarity in France and elsewhere will likely influence where future liquidity concentrates.
Tokenized stocks reach $2.3B as traditional finance experiments continue
Tokenized equities also chalked up a milestone. Cointelegraph cites Token Terminal data saying global market capitalization of tokenized stocks rose to a record $2.3 billion on Wednesday.
Ethereum led with a 34% share, followed by BNB Chain at 30% and Solana at 23%, according to the same Token Terminal dataset shared in a post on X by Token Terminal (see post).
Growth was driven by issuer and exchange-specific activity. Cointelegraph points to Kraken exchange’s xStocks representing $507 million and Binance’s bStocks at $334 million, while Ondo Finance remained the largest tokenized stock issuer with $955 million in onchain equities, based on Token Terminal data (Token Terminal explorer).
The custody and infrastructure layer remains a key battleground for legitimacy and scaling. Cointelegraph notes that the Depository Trust & Clearing Corporation (DTCC), described as custodian of $114 trillion in assets, launched a trial of tokenized securities in partnership with more than 40 financial firms.
Separately, Cointelegraph mentions Robinhood Chain’s ambition to lead in tokenized stocks, while also noting that its volume to date has been driven largely by memecoins—an observation that highlights how tokenized equity momentum may still depend on user acquisition beyond the “equities” narrative itself.
Regulatory alignment on stablecoins, compliance clock still ticking
US and UK authorities are seeking alignment on parts of tokenized finance. Cointelegraph reports that the US Department of the Treasury and HM Treasury in the UK issued four joint recommendations on digital assets (see linked coverage).
The task force recommends that regulators consider a private-sector-led group to test cross-border use cases for tokenized assets, while also asking US financial agencies and the Bank of England to identify shared regulatory approaches for tokenized assets.
On stablecoins, the statement says they “should be fully backed, on at least a one-to-one basis, by high-quality, liquid assets,” aligning with the structure in US law.
However, Cointelegraph also reports that, shortly afterward, it emerged that US regulatory agencies missed a Saturday rulemaking deadline for the GENIUS stablecoin act. Cointelegraph clarifies that missing a statutory deadline does not void the GENIUS Act, but could compress the time available for issuers to comply ahead of rules taking effect in January.
What to watch next
The next few weeks may determine whether the CLARITY Act can move past ethics-driven objections in the Senate, while the global pattern for prediction markets and tokenized assets will depend on how regulators translate policy into enforcement. Keep an eye on the CLARITY vote timetable, France’s follow-through on Polymarket restrictions, and how stablecoin compliance timelines evolve after the GENIUS rulemaking slip.
