JPMorgan Says Window Is Narrowing for U.S. Crypto Market Structure Bill

JPMorgan said the proposed U.S. crypto market structure bill, known as the Clarity Act, faces a narrowing path to passage this year as the congressional calendar tightens ahead of the midterm elections. Analysts led by Nikolaos Panigirtzoglou warned that unresolved policy disputes could delay broader crypto market-structure reform.

The legislation matters because it is widely seen as one of the crypto industry’s most important policy priorities in the U.S. Supporters say it would clarify whether digital assets fall under the Securities and Exchange Commission or the Commodity Futures Trading Commission, replacing years of uncertainty with more defined rules for issuers, exchanges and investors.

According to the report, the bill cleared the Senate Banking Committee on May 14 but still needs 60 votes in the full Senate, reconciliation with House legislation and the president’s signature. JPMorgan said those remaining steps, along with pushback from the banking industry, have reduced expectations that the measure will become law this year.

A key sticking point is whether stablecoins should be allowed to offer yield. JPMorgan said the legislation appears intended to block passive yield, such as interest on stablecoin balances, while allowing rewards linked to activity including payments, transactions, loyalty programs and trading incentives. The bank noted, however, that the current text is not as explicit as policymakers have suggested.

Banks have argued for tighter restrictions because stablecoin issuers do not face the same insurance, supervision and prudential rules as regulated depository institutions. Crypto companies have sought more flexibility for yield-bearing products. If lawmakers limit passive stablecoin yield, JPMorgan said more idle crypto capital could move toward tokenized Treasuries, digital money-market funds and tokenized deposits.