JPMorgan warns Clarity Act window is closing fast!

JPMorgan analysts led by Nikolaos Panigirtzoglou warned Wednesday that the U.S. crypto market structure bill — the Clarity Act — faces a narrowing legislative window as the midterm election calendar tightens and a key dispute over stablecoin yield remains unresolved. The bill cleared the Senate Banking Committee on May 14, but still needs 60 Senate votes, reconciliation with House legislation, and a presidential signature.

Why it matters

The Clarity Act is the crypto industry's single most important legislative priority: it would establish the first comprehensive federal framework for digital assets in the U.S., resolving years of regulatory ambiguity over whether crypto falls under the SEC or CFTC. A pre-midterm compromise and a post-midterm one could look materially different, given shifting political incentives — meaning delay is not neutral. Banking industry pushback has grown, and JPMorgan said growing opposition has already lowered expectations for enactment this year.

The central sticking point is stablecoin yield. The bill aims to prohibit passive yield — interest on balances — while permitting activity-based rewards tied to payments, transactions, and loyalty programs. Banks want tighter restrictions, arguing stablecoin issuers lack the insurance and supervisory requirements of regulated depository institutions. Crypto firms want flexibility to offer yield-bearing products. The current legislative text, JPMorgan noted, is less explicit about banning interest on balances than policymakers have suggested, leaving room for interpretation.