JPMorgan: Crypto Bill Faces Hurdles Before Midterms

JPMorgan analysts have cautioned that the U.S. crypto market structure bill, known as the CLARITY Act, faces a diminishing likelihood of passage this year as the 2026 midterm elections approach and disagreements over stablecoin yield persist. The bill successfully passed the Senate Banking Committee on May 14, but it still requires securing 60 votes in the full Senate, reconciliation with legislation passed by the House, and the signature of President Donald Trump to become law. JPMorgan analysts, led by Nikolaos Panigirtzoglou, highlighted these remaining hurdles as significant challenges given the tightening legislative calendar. The CLARITY Act aims to establish a federal framework for digital assets, clarifying regulatory oversight between the SEC and CFTC. A primary point of contention is whether stablecoin issuers and crypto platforms should be permitted to offer yield or interest-like rewards on stablecoin balances, a debate that has become a major obstacle to the bill's progress. The current draft restricts passive yield but allows rewards tied to user activity. Banks argue that stablecoin issuers should not offer deposit-like products without facing the same regulatory requirements as traditional lenders, while crypto firms advocate for greater flexibility, emphasizing the role of stablecoins in payments and market activity. JPMorgan suggests that stricter limits on passive stablecoin yield could redirect capital towards tokenized Treasuries and bank-linked cash products, potentially impacting certain crypto-native stablecoin business models. Senator Cynthia Lummis has defended the bill, stating it creates a level playing field and warning that failure to pass it could delay significant digital asset legislation until 2030. JPMorgan CEO Jamie Dimon has also expressed concerns about the bill, particularly regarding interest payments on stablecoin-like products and anti-money laundering requirements.