A recent analysis from JPMorgan (NYSE:JPM) has highlighted that the reduced likelihood of key US cryptocurrency market structure legislation advancing this year could exert downward pressure on the sector’s broader prospects. Analysts at the bank, led by managing director Nikolaos Panigirtzoglou, noted in a midweek research note that lower chances for the CLARITY Act represent a setback for digital asset markets.
Market-based forecasts now place the probability of the bill becoming law before the end of 2026 at approximately 37 percent on one prediction platform and about 26 percent on another—the weakest readings recorded this year.
This decline follows the Senate’s emphasis on competing priorities in the run-up to its summer recess.
Negotiations remain unresolved on several fronts, including ethics standards, enforcement approaches, stablecoin yield rules, decentralized finance treatment, and safeguards against illicit finance.
The researchers had earlier considered the CLARITY Act a supportive factor for crypto.
The proposal seeks to clarify regulatory responsibilities by placing digital commodities under the Commodity Futures Trading Commission (CFTC) and keeping digital securities with the Securities and Exchange Commission (SEC).
If enacted, it could advance institutional-grade infrastructure, reduce certain limitations on decentralized finance and stablecoin operators, promote a shift of liquidity and trading volumes toward US-regulated venues, and ease entry for brokerages, exchanges, market makers, custodians, and bank-related platforms.
Nevertheless, the team cautioned that particular aspects of the current draft risk discouraging institutional involvement.
One issue is the potential for decentralized finance systems to handle trading of tokenized securities and derivatives completely outside SEC or CFTC authority under the present language.
Another is the prospect of crypto entities facing minimal anti-money laundering requirements while performing functions similar to those of banks and broker-dealers.
These imbalances could reduce the attractiveness of broader participation by traditional institutions.
Prolonged delays in approving the CLARITY Act increase the possibility that expansion in tokenization and blockchain-based applications will be absorbed by established traditional financial systems rather than benefiting public crypto networks.
This scenario could constrain gains for open blockchain platforms even as other forms of institutional activity continue.
The House of Representatives passed its version of the legislation previously, but Senate advancement has been hampered by ongoing discussions.
Bipartisan adjustments continue, though a vote is anticipated to move past the August recess into mid-September or later.
Industry participants have called for faster progress to maintain US competitiveness in innovation and regulation.
Certain institutional steps are progressing independently, such as notable investments by traditional firms into crypto platforms and approvals for new regulated perpetual futures products.
Even so, JPMorgan views comprehensive market structure rules as a meaningful catalyst for more extensive institutional adoption. The bank’s assessment illustrates how lingering regulatory ambiguity continues to influence digital asset trajectories. Although the CLARITY Act offers a pathway to clearer rules and expanded participation, its current diminished odds and specific draft elements introduce measured caution regarding the medium- and longer-term outlook.
