TLDR
- JPMorgan said fading CLARITY Act odds weaken a key crypto market catalyst.
- Prediction markets show a 37% chance of CLARITY Act passage this year.
- Senate talks remain stuck on ethics, DeFi, stablecoin yield, and AML rules.
- JPMorgan said delays could shift tokenization growth toward traditional finance.
- SEC Chair Paul Atkins said the SEC can issue crypto rules if Congress fails to act.
JPMorgan said falling odds for the CLARITY Act have weakened one of crypto’s main policy catalysts, as Senate talks remain stuck before the August recess.
JPMorgan Warns on CLARITY Act Delay
JPMorgan said the lower chance of the CLARITY Act passing this year is a setback for digital assets. The bank said delays could slow institutional adoption, even as tokenization and blockchain-based applications continue to grow.
Prediction markets now show a 37% chance that the bill becomes law before year-end. The decline came after the Senate placed other bills ahead of crypto market structure legislation before its summer recess.
Analysts led by Nikolaos Panigirtzoglou said the delay could weaken public crypto networks if traditional finance captures more tokenization activity. They said,
“The longer the approval of the Clarity Act is postponed, the greater the threat to crypto markets.”
The bank said the bill could support regulated trading, institutional investment, and clearer rules for market participants. JPMorgan also said banks, exchanges, custodians, and market makers would benefit from lower barriers.
Senate Talks Remain Stuck on Key Issues
The CLARITY Act would divide digital asset oversight between the SEC and CFTC. The bill also aims to create clearer rules for crypto intermediaries, tokenization, decentralized projects, and trading venues.
Negotiations remain blocked over several issues. Lawmakers continue debating ethics provisions, enforcement powers, DeFi treatment, stablecoin yields, and anti-money laundering rules.
Crypto policy reporter Eleanor Terrett said the latest ethics proposal from Senators Thom Tillis and Ruben Gallego includes a role for state attorneys general. The White House is reviewing the draft, which could affect whether the Senate moves toward a vote next week.
Industry representatives have also pushed for an ethics compromise. The talks come as Senate lawmakers face limited time before the August recess.
Senator Cynthia Lummis said she had added many Democratic priorities to the bill. She said the draft includes 33 Democrat-driven edits in Title I, 23 new illicit finance sections, and 30 CFTC-related changes.
Lummis said,
“Perfect stopped being principled months ago. Now it’s just an excuse not to legislate. We have to pass the Clarity Act NOW.”
SEC Says Rulemaking Remains a Backup Plan
SEC Chair Paul Atkins said the agency is still assisting Congress with technical guidance on the bill. He said he remains optimistic that lawmakers can pass the legislation.
Atkins said the SEC can issue crypto market rules if Congress fails to act. However, he said agency rulemaking cannot replace a statute that gives the market longer-term certainty.
The SEC chair said the crypto market needs clear direction through law. A statute would also give regulators more stable authority over future market structure and digital asset activity.
JPMorgan said some institutional interest is already visible. The bank cited Citadel Securities’ $400 million investment in Crypto.com and the CFTC’s approval of U.S.-regulated perpetual crypto futures contracts.
The bank also warned that parts of the current draft could discourage some institutions. Its concerns include lighter oversight for some tokenized securities and weaker anti-money laundering standards than traditional finance faces.
A separate Jefferies report said the CLARITY Act still faces hurdles despite clearing the Senate Banking Committee. The next stage now depends on ethics talks, White House review, and whether Senate leaders give the bill floor time before recess.
