The Clarity Act faces multiple legislative challenges, with disputes over stablecoin yield being a significant issue, the bank noted.
By Will Canny, AI Boost|Edited by Jamie Crawley Jun 4, 2026, 11:10 a.m. 3 min readMake preferred on JPMorgan indicates that the chance for the crypto market structure bill to pass is decreasing as midterm elections approach. (CoinDesk)Key points:
- According to JPMorgan, the opportunity for Congress to pass the Clarity Act this year is diminishing as the midterm election timeline tightens.
- The ongoing debate regarding stablecoins' ability to offer yield remains the primary hurdle, with banks and crypto companies at odds.
- The bank noted that limitations on passive stablecoin yield could redirect more investments towards tokenized Treasuries, money-market funds, and tokenized deposits.
JPMorgan (JPM) has expressed concerns that the proposed Clarity Act, which aims to establish a regulatory framework for the U.S. crypto market, may have a limited chance of being enacted this year due to the approaching midterm elections and unresolved discussions surrounding stablecoin yield.
Analysts led by Nikolaos Panigirtzoglou stated in a report, "As the U.S. midterms draw near, the legislative window for the Market Structure Bill has shrunk, which could delay advancements in crypto market-structure reform this year."
The Senate Banking Committee approved the bill on May 14, yet it still requires 60 votes in the full Senate, alignment with House legislation, and the president's endorsement. These remaining hurdles, along with increasing resistance from the banking sector, have diminished the likelihood of the bill being passed this year, according to the analysts.
The timing of any agreement could also be crucial; a compromise reached before the midterms could differ significantly from one negotiated afterward, as political motivations may change.
The Clarity Act is seen as a critical legislative priority for the crypto sector, as it would create the first comprehensive federal framework for digital assets in the U.S.
Proponents argue that the legislation would eliminate longstanding ambiguity regarding whether cryptocurrencies are under the jurisdiction of the Securities and Exchange Commission (SEC) or the Commodity Futures Trading Commission (CFTC), replacing years of enforcement-based regulation with clearer guidelines for issuers, exchanges, and investors.
Advocates from the industry believe that establishing regulatory clarity could facilitate institutional involvement, spur investment and innovation, and retain crypto enterprises and capital within the U.S. rather than moving to jurisdictions with more developed frameworks for digital assets.
A significant point of contention is the regulation of stablecoin yields. The bank's analysts mentioned that the bill aims to ban "passive" yields, which refers to interest accrued on stablecoin holdings, while permitting rewards linked to activities like payments, transactions, loyalty programs, and trading incentives. However, the current wording of the bill is less clear about banning interest on balances than policymakers have indicated.
This distinction is vital as it affects whether stablecoins can act as alternatives to bank deposits, according to the report. The exemption is intended to maintain stablecoins' roles in payments and settlements while preventing them from turning into lightly regulated savings instruments.
Banks have advocated for stricter regulations, arguing that stablecoin issuers lack the insurance, oversight, and prudential standards expected of regulated banks. Conversely, crypto firms have sought more flexibility to provide yield-generating products. JPMorgan indicated that this disagreement has become a significant barrier to advancing the bill and is politically charged.
If lawmakers impose restrictions on passive stablecoin yields, the bank predicts that more idle crypto capital may flow into tokenized Treasuries, digital money-market funds, and tokenized deposits.
While this scenario may disappoint crypto-focused firms that have pushed for yield-generating stablecoins, the bill would still allow for some activity-based incentives. The report highlighted that the legislative text currently leaves room for interpretation, as it does not explicitly ban interest on balances.
Read more: Clarity Act could spark a boom in crypto ‘yield-as-a-service’
Clarity ActMarket Structure LegislationJPMorganAI Disclaimer: Portions of this article were generated with the help of AI tools and reviewed by our editorial team to ensure accuracy and compliance with our standards. For further details, see CoinDesk's complete AI Policy.More For You
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What to know:
- Russia has sanctioned a British teenager for exposing the alleged use of the ruble-pegged stablecoin A7A5 in supporting the war against Ukraine.
- The Russian Ministry dismissed the allegations as "defamatory speculations and false information."