JPMorgan Sees Mid-Year Approval for U.S. Crypto Market Bill

• JPMorgan sees mid-year approval of the CLARITY Act as a potential catalyst for crypto markets in H2.
• The bill would split oversight between the SEC and the CFTC, easing compliance for major tokens.
• Stablecoin yield and conflict-of-interest rules remain key hurdles in Senate talks.

JPMorgan analysts have reported that the U.S. crypto market structure legislation could receive approval by mid-year, possibly serving as a positive catalyst for digital asset markets in the second half of the year. 

In a recent report led by managing director Nikolaos Panigirtzoglou, the bank stated that even as crypto sentiment remains weak, progress on the proposed regulatory framework, widely known as the CLARITY Act, could provide clarity that reshapes the industry’s operating environment.

The House has advanced the bill, while discussions continue in the Senate. According to the analysts, if enacted, the legislation would end what they described as “regulation by enforcement,” establish clearer oversight boundaries, and promote greater institutional participation.

Key Provisions Could Redefine Oversight

A central feature of the proposed framework is the classification of tokens as either digital commodities regulated by the Commodity Futures Trading Commission or digital securities overseen by the Securities and Exchange Commission.

The analysts noted that this distinction could ease compliance requirements for major tokens. A grandfather clause would allow certain ETF-linked assets, including XRP, Solana, Litecoin, Hedera, Dogecoin, and Chainlink, to fall under CFTC oversight rather than securities regulation.

The bill would also introduce a grace period allowing new projects to raise up to $75 million annually without full SEC registration while working toward decentralization. In addition, tokens initially sold as securities could transition to commodity status once deemed sufficiently decentralized and no longer under managerial control. JPMorgan said such a pathway could expand secondary trading and facilitate institutional access through traditional brokerage channels.

The legislation further outlines registration and custody standards for crypto intermediaries, potentially enabling institutions such as BNY Mellon and State Street to directly custody digital assets. It also clarifies that tokenized securities remain subject to existing securities laws, a move the analysts said could support tokenization efforts by firms building related infrastructure.

Stablecoin Debate and Market Implications

Two issues remain under negotiation. One concerns whether stablecoin issuers may offer yield to holders, a proposal supported by crypto firms but opposed by banks, citing potential deposit outflows and financial stability risks.

The second centers on conflict-of-interest provisions, with Democrats seeking restrictions on crypto-related financial activities involving senior government officials and their families. The White House has hosted closed-door meetings between industry and banking representatives as talks continue.

Additional provisions include exemptions for miners, validators, and developers from broker-style reporting during development, small-transaction tax exemptions for crypto payments, and clarified staking tax treatment. JPMorgan also noted the bill could shift institutional preference toward tokenized deposits over stablecoins.

Related: Ripple CEO Brad Garlinghouse Says the Door to a Bank-Crypto Deal Is Wide Open