The chances of passing the CLARITY Act this year have narrowed as lawmakers face a crowded legislative calendar and unresolved disputes over key provisions, according to JPMorgan analysts.
Summary
- JPMorgan analysts said the window for passing the CLARITY Act is narrowing as Congress faces a packed schedule ahead of the 2026 midterm elections.
- Stablecoin reward provisions remain a major point of disagreement between banks and crypto advocates.
- Senator Cynthia Lummis said Senate action on the bill may not occur until August.
According to a report from JPMorgan analysts led by Nikolaos Panigirtzoglou, political timing is becoming one of the biggest obstacles to the crypto market structure bill. The analysts said the approach to the 2026 U.S. midterm elections is reducing the time available for Congress to advance major digital asset legislation, raising the possibility that market structure reforms could be delayed.
The CLARITY Act would establish a federal framework for regulating digital assets and divide oversight responsibilities between the Securities and Exchange Commission and the Commodity Futures Trading Commission.
Although the legislation recently advanced to the Senate calendar, several steps remain before it can become law, including Senate approval, reconciliation with House legislation, and a signature from President Donald Trump.
Adding to the uncertainty, JPMorgan said the final shape of the legislation could depend heavily on political developments over the coming months. The analysts noted that a bill negotiated before the midterm elections could look substantially different from one considered afterward, particularly if control of Congress changes.
Stablecoin provisions remain a sticking point
Alongside concerns over timing, disagreements surrounding stablecoin rules continue to weigh on the bill’s prospects.
In JPMorgan’s view, opposition from parts of the banking industry has intensified because of provisions dealing with stablecoin rewards and interest-like products. The analysts pointed to continuing debates over whether issuers should be allowed to provide returns on stablecoin balances without being subject to the same requirements that govern traditional banks.
Recent comments from banking executives have highlighted those concerns. JPMorgan Chief Executive Officer Jamie Dimon and New York Citi Bank Chairman and CFO David L. Cohen have both criticized aspects of the legislation, arguing that some provisions could create regulatory gaps.
During a CNBC interview, Dimon also criticized Coinbase Chief Executive Officer Brian Armstrong and claimed the legislation would allow crypto firms to offer products similar to bank deposits without equivalent protections. He further argued that the bill does not adequately address Anti-Money Laundering requirements or obligations under the Bank Secrecy Act.
Those claims were challenged by Senator Cynthia Lummis, chair of the Senate Banking Subcommittee on Digital Assets. Speaking to CNBC, Lummis said AML and Bank Secrecy Act requirements already apply to digital assets and are included in the legislation. She also accused Dimon of misrepresenting the legislation, saying the JPMorgan chief “either hasn’t read the bill or he wants to mislead people.”
Senate negotiations continue as August timeline emerges
While debate over stablecoins has attracted significant attention, lawmakers are still working through several other sections of the legislation.
Speaking with journalist Eleanor Terrett, Lummis said a Senate vote before the July 4 recess remains possible but suggested that action before the August recess is more likely.
According to Lummis, lawmakers must still combine provisions from the Senate Banking Committee, the Senate Agriculture Committee, ethics-related measures, and certain changes connected to the GENIUS Act before the final package is ready.
Developer protections have also become part of the negotiations. The Blockchain Regulatory Certainty Act language included within the CLARITY Act would shield developers of decentralized software from being treated as money transmitters when they do not take custody of customer funds.
Support for that provision has grown in recent weeks. Defend Developers recently launched a political action committee focused on supporting blockchain developers, decentralized finance builders, and software engineers.
Separately, the Blockchain Association said 160 former national security, intelligence, and law enforcement officials signed a letter urging Congress to move the legislation forward, describing digital asset regulation as a national security and law-enforcement priority.
Even with that support, Lummis acknowledged that securing the 60 votes needed for cloture and finalizing the legislative package could take longer than initially expected.
