JPMorgan warns declining CLARITY Act odds and draft provisions on DeFi and AML could slow institutional crypto adoption. Senate vote expected after recess, analysts said.
Alpha Score of 67 reflects moderate overall profile with strong momentum, moderate value, moderate quality, moderate sentiment.
The probability of the CLARITY Act becoming law before the end of 2026 has dropped to 37% on one prediction platform and 26% on another, the weakest readings this year, JPMorgan analysts led by Nikolaos Panigirtzoglou wrote in a research note. The declining odds mark a setback for digital asset markets, the bank said, after the Senate prioritized other business ahead of its summer recess.
Negotiations remain stalled on several fronts, the analysts said. Issues include ethics standards, enforcement approaches, stablecoin yield rules, and decentralized finance treatment. The House passed its version of the legislation earlier. The Senate has not advanced a companion bill. A previous AlphaScala article noted that the odds had earlier sunk to 27% after Senate delays.
The CLARITY Act would clarify regulatory jurisdiction by placing digital commodities under the Commodity Futures Trading Commission and keeping digital securities with the Securities and Exchange Commission. The proposal had been viewed by JPMorgan as a supportive factor for crypto.
JPMorgan cautioned that specific parts of the current draft could discourage institutional involvement. One issue: the language might let decentralized finance systems handle trading of tokenized securities and derivatives entirely outside SEC or CFTC authority. Another: crypto entities could face minimal anti-money laundering requirements while performing functions similar to banks and broker-dealers. These imbalances, the analysts said, could reduce the appeal for traditional institutions to participate broadly.
Prolonged delays in passing the bill also increase the risk that tokenization and blockchain-based applications will be absorbed by established financial systems rather than benefit public crypto networks. That scenario would limit gains for open blockchain platforms even as other institutional activity continues, the note said.
A Senate vote is expected after the August recess, possibly in mid-September or later. Industry participants have called for faster progress to maintain US competitiveness in innovation and regulation. Some institutional steps are moving independently, including investments by traditional firms into crypto platforms and approvals for new regulated perpetual futures products. Still, JPMorgan views comprehensive market structure rules as a meaningful catalyst for broader institutional adoption.
JPMorgan shares (JPM) traded at $351.79, up 0.27% on the day, with an AlphaScore of 66.
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