JPMorgan: Probability of Clarity Act Passing Within the Year Decreases, Potentially Undermining Crypto Market Prospects

Odaily Odaily reports that analysts at JPMorgan stated that the probability of the U.S. crypto market structure bill, the Clarity Act, passing the Senate by the end of this year has decreased, posing a headwind for the cryptocurrency market. Analysts pointed out that prediction markets show the likelihood of the bill passing this year has dropped to its lowest point of the year, with Kalshi at 37% and Polymarket at 26%.

JPMorgan noted that the Senate prioritized other legislative matters before the summer recess. Additionally, unresolved issues such as ethical clauses, enforcement authority, stablecoin yields, DeFi, and illicit finance have made the bill's advancement prospects more uncertain. The bank had previously viewed the Clarity Act as a potential positive catalyst for the crypto market, as it would establish a clearer regulatory framework for the digital asset industry: digital commodities would be regulated by the CFTC, while digital securities would continue to fall under the SEC's jurisdiction.

Analysts believe that if the bill is ultimately passed, it would help develop more institutionalized market infrastructure, ease regulatory restrictions on DeFi and stablecoin issuers, boost domestic liquidity and trading volumes in the U.S., and lower the barriers to entry for brokerages, exchanges, market makers, custodians, and bank-related platforms seeking to participate in the crypto industry.