CLARITY Act uncertainty spurs CFTC bid to regulate prediction markets as Senate eyes stablecoin yield caps

The fate of the CLARITY Act remains uncertain, and industry representatives warn that failure to pass the bill would deepen an existing regulatory vacuum; Katherine Kirkpatrick noted the SEC has already submitted interpretive guidance to the White House on how existing securities laws should apply to crypto assets ^[1].

CFTC Chair Michael Selig has outlined an alternative regulatory path, proposing to replace a de facto ban on prediction markets with a derivatives‑style rulebook under CFTC authority and launching formal rulemaking for event contracts and DeFi oversight; he said the CFTC and SEC are coordinating under initiatives like Project Crypto and that the agency will clarify registration requirements for DeFi software providers and assert authority in court where necessary ^[2][3][5].

Lawmakers are simultaneously negotiating CLARITY provisions that would limit yields on stablecoins and affect banks; Senator Angela Alsobrooks warned the bill’s middle ground will likely leave stakeholders “a little bit unhappy,” underscoring the political trade‑offs in the ongoing markup process ^[4][6].

With congressional action uncertain, federal regulators are moving ahead with agency‑level guidance and rulemaking while lawmakers continue to debate CLARITY’s terms—particularly stablecoin yield limits—leaving market participants to adapt to parallel legislative and regulatory initiatives ^[1][3][4][6].