JPMorgan says the CLARITY Act faces a narrowing path to passage in 2026 as political hurdles and stablecoin yield disputes intensify.
Crypto News
JPMorgan said on June 4 that the US crypto market structure bill, known as the CLARITY Act, has a shrinking window for passage this year. A team of analysts led by managing director Nikolaos Panigirtzoglou issued the warning in a Thursday report. The bank had previously stated that passage of the bill would likely act as a positive catalyst for crypto markets in the second half of 2026.
"With the US midterms approaching, the legislative window for passage of the Market Structure Bill has narrowed, which could postpone progress on crypto market-structure reform this year," the analysts wrote. The CLARITY Act cleared the Senate Banking Committee on May 14, 2026. It still requires 60 votes in the full Senate, reconciliation with House legislation, and a presidential signature. JPMorgan described those remaining steps as several high-friction hurdles.
The analysts also noted that a compromise reached before the midterms could look materially different from one negotiated after the elections, when political incentives may shift. Growing pushback from the banking industry has further reduced expectations that the bill will be enacted this year, according to the report.
The CLARITY Act is widely regarded as the crypto industry's most important US legislative priority. It would establish the first comprehensive federal framework for digital assets and resolve a long-running jurisdictional dispute between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) over which agency governs cryptocurrencies. Supporters argue the legislation would replace years of enforcement-driven regulation with stable, predictable rules for issuers, exchanges, and investors.
The Stablecoin Yield Dispute
The treatment of stablecoin yield has become the central point of disagreement between banks and crypto firms. The bill is intended to prohibit passive yield, meaning interest paid to holders simply for holding a stablecoin balance, while still permitting rewards tied to user activity such as payments, transactions, loyalty programs, and trading incentives. JPMorgan's analysts noted, however, that the current bill text does not explicitly ban interest on balances, leaving room for competing interpretations.
That distinction determines whether stablecoins can function as substitutes for bank deposits. Banks have pushed for tighter language, arguing that stablecoin issuers are not subject to the deposit insurance, supervisory oversight, and capital requirements that apply to regulated depository institutions. Crypto firms have sought greater flexibility to offer yield-bearing products. JPMorgan described the dispute as politically charged and identified it as a primary obstacle to the bill's advancement.
JPMorgan CEO Jamie Dimon said last week that he was dissatisfied with how the CLARITY Act is currently written. He warned that banks would oppose the bill if crypto platforms were permitted to offer interest-like rewards without facing the same regulatory requirements as banks. US Treasury Secretary Scott Bessent stated a different position earlier that week, pressing lawmakers to support the bill and calling for its passage by summer 2026.
The Blockchain Association sent a letter on June 3 to Senate Majority Leader John Thune and Senate Democratic Leader Charles Schumer. The letter was signed by 160 former national security and law enforcement officials, urging the Senate to pass the legislation. TD Cowen Washington Research Group Managing Director Jaret Seiberg said he remains pessimistic that the bill will clear this year, pointing to ongoing legislative hurdles and a worsening political environment around the legislation.
JPMorgan said that if passive stablecoin yield is ultimately restricted, capital currently sitting in stablecoins would likely accelerate its move toward tokenized Treasuries, digital money-market funds, and tokenized deposits. The bank noted that outcome may not align with the goals of crypto-native firms that have advocated for yield-bearing stablecoin products.
Related Article: Blockchain Association Urges Senate To Pass CLARITY Act
This article contains links to third-party websites or other content for information purposes only (“Third-Party Sites”). The Third-Party Sites are not under the control of CoinMarketCap, and CoinMarketCap is not responsible for the content of any Third-Party Site, including without limitation any link contained in a Third-Party Site, or any changes or updates to a Third-Party Site. CoinMarketCap is providing these links to you only as a convenience, and the inclusion of any link does not imply endorsement, approval or recommendation by CoinMarketCap of the site or any association with its operators. This article is intended to be used and must be used for informational purposes only. It is important to do your own research and analysis before making any material decisions related to any of the products or services described. This article is not intended as, and shall not be construed as, financial advice. The views and opinions expressed in this article are the author’s [company’s] own and do not necessarily reflect those of CoinMarketCap.
