JPMorgan Says CLARITY Act Faces Fading Odds as Senate Crypto Fight Intensifies

JPMorgan says the CLARITY Act, a major U.S. crypto market structure bill, may be running out of time as Congress gets buried under competing priorities and the 2026 midterm clock starts ticking louder.

• Passage odds are fading
• Stablecoin rewards remain the biggest fight
• Senate timing may slip into August
• Developer protections are gaining support

In a note led by JPMorgan analyst Nikolaos Panigirtzoglou, the bank said the chances of passing the CLARITY Act this year have “narrowed.” Translation: Congress is doing what Congress does best — running out of time while pretending time isn’t the problem.

The CLARITY Act is meant to create a federal regulatory framework for digital assets. It would split oversight between the Securities and Exchange Commission and the Commodity Futures Trading Commission, which matters because today’s U.S. crypto regulation often feels like a legal swamp with two different guys holding maps and disagreeing on where the swamp even begins. For exchanges, builders, token issuers, and investors, that kind of ambiguity is expensive, risky, and frankly ridiculous.

The bill still has a long road ahead. It needs Senate approval, reconciliation with House legislation, and President Donald Trump’s signature before it can become law. That’s not a quick checklist. That’s a political obstacle course with a few landmines scattered in for good measure.

JPMorgan says the real pressure is coming from the calendar. Congress has a crowded legislative agenda, and the closer lawmakers get to the 2026 midterms, the more incentive they have to dodge controversial votes and kick hard decisions into the next news cycle. The bank also pointed to unresolved policy disputes that are slowing progress further.

The biggest sticking point right now is stablecoin rewards.

Stablecoins are cryptocurrencies designed to keep a steady value, usually by tracking the U.S. dollar. Stablecoin rewards are incentives or yield-like payouts offered to users who hold or use those tokens. That sounds harmless until you ask the banking lobby, which sees a familiar problem: if crypto firms can offer deposit-like returns without being treated like banks, why should banks be forced to play by heavier rules?

JPMorgan says banks oppose those provisions because they believe stablecoin issuers could end up offering products that look a lot like interest-bearing deposits without the same protections, oversight, or capital requirements that traditional banks face. And yes, the banking industry is suddenly very passionate about consumer protection the second someone else gets to offer a competitive product. Amazing how that works.

JPMorgan CEO Jamie Dimon took the criticism further, arguing that the bill could let crypto firms offer products “similar to bank deposits without equivalent protections.” He also said the legislation does not adequately address “Anti-Money Laundering requirements or obligations under the Bank Secrecy Act.”

“similar to bank deposits without equivalent protections”

“Anti-Money Laundering requirements or obligations under the Bank Secrecy Act”

Those are not trivial concerns. AML, or anti-money laundering rules, are meant to stop criminal funds from flowing through financial systems. The Bank Secrecy Act requires certain financial institutions to keep records and report suspicious activity. If a crypto law ignores those obligations, it would be a gift-wrapped headache for regulators and a bad look for the entire sector.

Senator Cynthia Lummis pushed back hard, saying Dimon “either hasn’t read the bill or he wants to mislead people.” She said the requirements he cited already apply and are included in the legislation.

“either hasn’t read the bill or he wants to mislead people”

Lummis also said a Senate vote before July 4 is possible, but action before the August recess is “more likely.” In Senate terms, that’s not exactly a victory lap. It is, however, a sign the bill is still alive rather than locked in a legislative freezer.

The final package still has to combine work from the Senate Banking Committee and the Senate Agriculture Committee, along with ethics-related provisions and changes tied to the GENIUS Act. For readers not steeped in Capitol Hill jargon, that means the bill is being assembled from multiple political lanes, each with its own interests, priorities, and favorite ways to slow everything down.

The GENIUS Act is another legislative effort tied to stablecoin and digital asset policy, and folding parts of it into the broader package adds another layer of negotiation. More moving pieces means more chances for compromise, more chances for delay, and more chances for someone to say “we’re very close” for the fifteenth time.

That said, there is still meaningful momentum behind the core idea of the bill. The crypto industry has spent years demanding a real federal framework instead of being whipsawed by enforcement actions, contradictory agency interpretations, and courtroom roulette. The CLARITY Act aims to define what falls under securities rules and what belongs under commodities oversight. That distinction is not academic. It affects how tokens are classified, how exchanges list assets, how compliance costs are calculated, and how much legal risk companies have to price into every decision.

One of the more constructive parts of the bill is the Blockchain Regulatory Certainty Act language. It would protect some software developers from being treated as money transmitters if they do not custody user funds.

That matters a lot.

A money transmitter is a business that moves funds on behalf of others. If developers who simply write open-source code are treated like custodial financial intermediaries, the result is not consumer safety — it’s regulatory overreach that could scare off builders, crush innovation, and hand a giant gift to the compliance departments of incumbents who already dominate the system. Non-custodial developers are not holding customer funds. Treating them like they are would be as sloppy as it is unfair.

That’s why Defend Developers recently launched a PAC to support blockchain developers and DeFi builders. The move signals that the fight over crypto regulation is no longer just about exchanges and token issuers. It is also about whether open-source software creators can work in the United States without being dragged through legal mud for building code that doesn’t even touch customer assets.

Support for the bill is also expanding outside the crypto bubble. JPMorgan noted that 160 former national security, intelligence, and law enforcement officials signed a letter backing the legislation. That matters politically because it gives lawmakers cover to treat crypto market structure as a national competitiveness and security issue, not just a niche tech fight or a Silicon Valley tantrum.

Still, the math in the Senate is ugly. Lummis acknowledged that securing the 60 votes needed for cloture may take longer than expected. Cloture is the Senate’s procedural gatekeeper — the vote that cuts off debate and allows legislation to move forward. Sixty votes is a high bar, especially in a divided Congress where every meaningful vote is also a rehearsal for campaign ads, donor emails, and cable news posturing.

That’s why JPMorgan’s warning matters. The bank is not saying the CLARITY Act is dead. It is saying the window is shrinking. Those are two very different things. A pre-recess compromise is still possible. A post-election version could look very different. And if lawmakers drag this into the next phase of political chaos, the bill may come out watered down, rewritten, or buried under a fresh pile of partisan nonsense.

For Bitcoin and the broader crypto industry, the stakes are clear. A sensible U.S. crypto market structure bill could give builders the certainty they need, reduce the chance of arbitrary enforcement, and finally put some daylight between honest projects and the usual scam garbage that thrives in regulatory fog. But a bad compromise could just entrench the same legacy players, bless their toll booths, and call it progress.

That is the real tension here: clarity versus delay, innovation versus capture, and rule-making versus bureaucratic theater. Washington still has a chance to build a serious framework for digital assets. Whether it actually takes that chance depends on how much political courage survives the next few months.

• Is the CLARITY Act likely to pass this year?
  JPMorgan says the odds are fading because Congress is running out of time and the political pressure is rising.
• What is the CLARITY Act supposed to do?
  It would create a federal crypto market structure and split oversight between the SEC and CFTC.
• Why are stablecoin rewards causing so much friction?
  Banks worry they could act like deposit products or yield accounts without the same rules and protections that apply to traditional finance.
• What does “cloture” mean?
  It is the Senate vote needed to end debate and move a bill forward. Sixty votes are usually required.
• Why do developer protections matter?
  They could shield non-custodial software builders from being treated like money transmitters, which would help protect open-source development.
• Does the bill have support beyond crypto companies?
  Yes. JPMorgan said 160 former national security, intelligence, and law enforcement officials signed a letter backing it.
• Could the final bill change after the elections?
  Yes. JPMorgan says a post-election version could look very different from anything negotiated before the political calendar turns even uglier.