JPMorgan Chase stated that with the US midterm elections approaching, the time available for Congress to push through crypto market structural reforms this year is shortening. While the Clarity Act has passed the committee stage, many procedures remain, and the issue of stablecoin yields continues to slow its progress.
The bill still awaits a vote in the Senate.
According to JPMorgan Chase, the bill still needs 60 votes in the full Senate, must be reconciled with the House version, and then be sent to the president for signature. Analysts believe that with the compressed election schedule, the expectation of completing legislation this year has decreased.
The market has consistently viewed the Clarity Act as a key legislative agenda item for the US crypto industry. Supporters believe that if the bill is passed, it will establish a relatively comprehensive regulatory framework for digital assets at the federal level for the first time, and further clarify the regulatory division of labor between the SEC and CFTC.
Stablecoin yields become a focal point of disagreement
JPMorgan Chase points out that the current controversy centers on whether stablecoins can provide "passive income" to holders. According to the direction of policy discussions, the bill tends to restrict direct interest payments based on stablecoin balances, but may retain rewards related to payments, transactions, loyalty programs, or transaction incentives.
The bank believes this distinction is important because it determines whether stablecoins will become more like bank deposit products. The banking industry wants stricter restrictions, arguing that stablecoin issuers do not bear the same insurance, prudential supervision, and capital requirements as regulated depository institutions. Crypto companies, on the other hand, want to retain greater flexibility to launch yield-bearing products.
Idle funds may be redirected to RWA
JPMorgan Chase also noted that the existing bill text is not entirely clear on the "prohibition of interest on outstanding balances," which leaves room for further negotiations and increases the political sensitivity of the process.
If lawmakers ultimately impose effective restrictions on passive returns from stablecoins, the bank anticipates that some idle crypto funds may further flow into products such as tokenized U.S. Treasury bonds, digital currency market funds, and tokenized deposits. The final version of the bill may also differ significantly depending on whether it enters different negotiation stages before or after the midterm elections.
