Crypto Law May Hit a Dead End Before Midterms

JPMorgan Chase analysts warn that the CLARITY Act, a bill meant to shape the crypto market, might stall before it even takes effect, especially with the U. S. midterm elections on the horizon. The team led by Nikolaos Panigirtzoglou previously thought the bill could lift digital asset prices in late 2026, but now they see a risk that it won’t finish this year. To pass the Act, lawmakers need 60 Senate votes, a match between House and Senate drafts, and a presidential signature – all tough to secure when politicians’ priorities shift around elections. A compromise made before the midterms could look very different from one reached afterward, because lawmakers’ incentives change when they’re fighting for reelection.

The biggest stumbling block in the talks is how stablecoins can earn interest. Current rules would stop banks from giving passive rewards just for holding a stablecoin, but would allow bonuses tied to payments or trading. Banks argue that crypto firms should not offer “savings‑like” products without the same rules that apply to regular banks, while crypto companies want more freedom to give users yield on stablecoin use. The debate is now political, as it could decide whether stablecoins become true rivals to bank deposits. Stricter limits on stablecoin yield might push money into tokenized Treasury products or digital money‑market funds instead of crypto‑native earning tools. The outcome will shape whether crypto can grow as a mainstream financial option or remain a niche alternative.

Actions