JPMorgan has said that declining prospects for the Clarity Act in the US Senate are a setback for crypto markets, warning that delays could undermine institutional confidence.
Probability of the Clarity Act passing before year-end, according to prediction markets.
Senate Stalemate and Key Disagreements
The US Senate has prioritized other bills ahead of its summer recess, the report noted. Negotiations over the Clarity Act remain deadlocked on several issues, including ethics provisions, enforcement, decentralized finance (DeFi), stablecoin yield, and anti-money laundering rules.
The longer the approval is postponed, the greater the threat to crypto markets.
What the Clarity Act Would Do
The Clarity Act would divide jurisdiction over crypto between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It would also create a more predictable framework for crypto intermediaries, tokenization, and decentralized projects, and is widely viewed as a cornerstone for the next phase of institutional crypto adoption.
According to JPMorgan, the legislation could give banks, brokers, exchanges, and asset managers greater confidence to invest, launch products, and build market infrastructure. The analysts said the bill would encourage institutional investment, boost US-regulated trading, and lower barriers for banks, exchanges, custodians, and market makers.
Citadel Securities has invested $400 million in Crypto.com, and the US CFTC approved the first US-regulated perpetual crypto futures contracts, signaling ongoing institutional interest.
Investment bank Jefferies also warned that the Clarity Act still faces significant hurdles despite clearing the Senate Banking Committee.