JPMorgan warned Thursday that time is running short for the Clarity Act, the long-awaited crypto market structure bill that has been grinding through Congress. The bank's note, circulated to clients, highlights the risk that the legislative window could close if lawmakers don't resolve a final sticking point — disputes over stablecoin yield.
The regulatory clock
The Clarity Act faces multiple legislative hurdles before it can become law. JPMorgan's analysts said the bill's path is narrowing, without offering a specific deadline. With the current session of Congress moving toward midterm elections, any unfinished business could be pushed to the back burner — or dropped entirely.
Where the bill is stuck
The most immediate obstacle is a disagreement over how stablecoins should treat yield. Some lawmakers want to allow stablecoin issuers to pass through interest or yield to holders, effectively turning them into interest-bearing accounts. Others argue that structure would transform stablecoins into securities, triggering a different regulatory framework. That debate has held up the broader package.
The standoff isn't new — policy watchers have been tracking it for months. But JPMorgan's warning adds weight to the view that the gridlock could be fatal.
What happens next
Staffers in both chambers are expected to resume talks next week, though the stablecoin yield question is unlikely to be resolved quickly. A draft compromise floated earlier this spring didn't break the impasse. If no deal emerges in the next few weeks, the Clarity Act may not clear both houses before the election season pushes everything else aside.
