CLARITY Act May Drive Crypto Growth in Second Half

Key Insights:

• JPMorgan expects CLARITY Act could classify tokens, ease compliance, and boost institutional crypto participation.
• Stablecoin yield treatment and conflict-of-interest rules remain main debates delaying CLARITY Act passage.
• Tokenized deposits, intermediary rules, and tax clarity may support crypto market growth if bill passes.

JPMorgan Chase analysts said the U.S. crypto market structure bill, called the CLARITY Act, could pass by mid-year. Approval may act as a catalyst for crypto markets in the second half of 2026. The legislation is designed to provide clear rules for digital assets, end “regulation by enforcement,” and support institutional participation.

Analysts stated, 

“If passed it will reshape market structure by providing regulatory clarity, ending ‘regulation by enforcement,’ promoting tokenization, and facilitating greater institutional participation.” 

They noted that approval could improve conditions for tokenized assets and encourage institutions to enter the market.

Debates on Stablecoins and Conflicts of Interest

Two main issues are delaying the bill. One is the treatment of stablecoin yields. Crypto companies want to offer rewards for holding stablecoins, while banks say this could draw deposits away from the traditional banking system and create financial risks.

The second issue involves conflict-of-interest rules. Lawmakers want limits to prevent senior government officials and their families, including the President, from engaging in certain crypto-related financial activities. Multiple meetings have taken place between crypto representatives and banking groups, but a final agreement has not yet been reached.

Proposed Changes and Benefits

The bill sets a framework to classify tokens as digital commodities or securities. Certain tokens, including XRP, Solana, Litecoin, Hedera, Dogecoin, and Chainlink, may fall under a lighter regulatory regime. Analysts say this could reduce compliance burdens and support institutional trading.

The CLARITY Act would allow new projects to raise up to $75 million annually without full SEC registration. Other measures include clear rules for intermediaries, support for tokenized traditional assets, exemptions for developers during early stages, and clarified tax rules for small crypto payments and staking.

Market Outlook

JPMorgan analysts said tokenized deposits may grow compared to stablecoins, and institutional participation could increase. Analysts maintain a long-term bitcoin price target of $266,000 based on comparisons with gold.

At the time of reporting, bitcoin was trading around $66,257, down slightly in the last 24 hours. Analysts noted that while crypto sentiment remains weak, approval of the CLARITY Act could support market activity in the second half of 2026.

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