JPMorgan analysts say the chances of Congress approving the U.S. crypto market structure bill known as the Clarity Act are slipping, as midterm elections draw closer and a core policy fight over stablecoin yield remains unresolved.
In a recent report, the bank described the dispute over whether crypto platforms can pay yield on stablecoins as the main obstacle blocking progress this year. Without a breakthrough, they warned, a clear federal rulebook for digital assets is unlikely in the near term, keeping regulatory uncertainty in place for traders and companies.
Multiple hurdles left in Congress
The Clarity Act cleared the Senate Banking Committee on May 14, but still faces a long path. It needs 60 votes to pass the full Senate, reconciliation with any House version, and final approval from the President.
JPMorgan analyst Nikolaos Panigirtzoglou wrote that each of these steps is a potential friction point that could slow or derail the bill. He noted that legislative priorities typically shift both before and after midterm elections, tightening the timeline for any complex, contested package.
Even though the bill was placed on the Senate legislative calendar on June 1, 2026, making it formally eligible for floor debate and a vote, no clear schedule has emerged. Analysts say this leaves markets to navigate a prolonged period of uncertainty over the regulatory framework.
Stablecoin yield at center of dispute
At the heart of the fight is whether crypto platforms should be allowed to pay yield or interest-like rewards on stablecoin holdings.
The current draft aims to ban passive yield on stablecoin balances while still allowing rewards tied to activity such as payments, transactions, and loyalty programs. However, JPMorgan notes that the text is not fully explicit on prohibiting interest on idle balances, leaving room for differing interpretations.
Banks are pressing for tighter language to close what they see as loopholes that could enable unregulated, savings-style products outside the traditional banking system. Crypto firms, by contrast, argue that strict yield limits would stifle innovation and reduce the appeal of stablecoins as a digital alternative to cash-like instruments.
The bill is structured to keep stablecoins primarily focused on payments and settlement, while maintaining competitive parity with insured deposit-taking institutions. JPMorgan analysts say this is meant to prevent digital asset platforms from offering bank-like services without corresponding oversight and capital rules.
Political and industry lines harden
JPMorgan characterizes the yield question as politically sensitive, reflecting opposing policy goals between the financial sector and the digital asset industry. Restricting passive yield, they say, could push idle crypto funds into tokenized Treasuries, digital money market products, or tokenized deposits, where returns are clearly framed as securities or deposit products.
The debate is also playing out amid broader public concerns. A recent survey for the American Bankers Association found that 57 percent of consumers believe Congress should bar crypto firms from offering yield if doing so would reduce funding available for local bank lending.
Within Washington, opinions are sharply divided. JPMorgan chief executive Jamie Dimon said last week he does not support the bill in its current form, arguing that it still allows unregulated yield offerings. By contrast, Treasury Secretary Sarah Bessent urged lawmakers earlier this week to move the bill forward this summer.
Industry groups are also active. The Blockchain Association, joined by 160 former national security and law enforcement officials, recently sent a letter urging Senate leaders to back passage of the legislation.
Lobbying escalates as calendar shrinks
Despite ongoing technical work on the bill, TD Cowen’s Washington Research Group analyst Jaret Seiberg says the likelihood of near-term approval remains low. He cites unresolved policy divides and a political environment that is becoming less conducive to complex financial legislation as the midterms approach.
Lobbying around the measure has intensified. A new political action committee, Defend Developers PAC, launched this week to push for stronger protections for software developers in any final package.
Crypto-linked political spending is also rising. Crypto-affiliated PACs have spent about $32 million so far in the current election cycle, according to public filings, while one major super PAC, Fairshake, is reported to hold more than $193 million in cash.
JPMorgan’s own position adds to the pressure. Dimon, whose bank runs a blockchain-based payments network that processes more than $1 billion a day, has vowed to “fight” the legislation as written. His stance highlights the banking sector’s concern that the Clarity Act does not yet deliver a fully level playing field between traditional finance and digital asset platforms.
Market impact and outlook
While the legislative battle unfolds, crypto markets have shown strain. Spot Bitcoin ETFs saw nearly $2 billion in net outflows during May, reflecting a cautious mood as regulatory timelines remain unclear.
JPMorgan analysts say the combination of shrinking legislative calendar, entrenched policy disagreements, and heightened political sensitivities has significantly reduced the chances that the Clarity Act will pass this year. Until there is clarity on stablecoin yield and broader digital asset rules, they expect traders and companies to continue operating in a fragmented and shifting regulatory landscape.
For deeper context on U.S. regulation and stablecoins, explore how policy shifts shape crypto in this regulatory outlook analysis.
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