Key Insights:
- JPMorgan says Clarity Act approval could lift the U.S. crypto market in H2 2026.
- Bill would end “regulation by enforcement” and clarify SEC–CFTC oversight.
- Framework may ease compliance, boost tokenization, and expand institutional access.
The U.S. crypto market could strengthen in the second half of 2026 if Congress approves the Clarity Act by mid-year, according to JPMorgan analysts. The bank said legislative progress may act as a key catalyst despite weak sentiment.
Analysts led by managing director Nikolaos Panigirtzoglou stated that passage would likely reshape digital asset regulation and support broader participation.
Although sentiment in the U.S. crypto market remains subdued, JPMorgan expects regulatory clarity to improve conditions later in the year. The analysts described the proposed bill as a structural shift rather than a minor adjustment. They added that clearer rules could reduce the uncertainty that has constrained institutional involvement.
The legislation, widely known as the Clarity Act, seeks to create a broad regulatory framework for digital assets in the United States. The House has advanced the bill, while the Senate continues discussions. However, negotiations remain ongoing as lawmakers address unresolved issues.
U.S. Crypto Market Awaits Resolution on Key Issues
Two central disputes continue to delay approval. One involves treating stablecoin yield. Crypto firms want to offer rewards to users holding stablecoins, while banks argue that yield-bearing balances could draw deposits away from traditional institutions and create financial stability risks.
Another dispute in the U.S. crypto market centers on conflict-of-interest provisions. Some Democrats seek restrictions that would prevent senior government officials and their families, including the President, from engaging in certain crypto-related financial activities.
Despite these hurdles, JPMorgan said that if enacted, the legislation would end what analysts described as “regulation by enforcement.” The bill would also establish clearer jurisdictional boundaries between the Commodity Futures Trading Commission and the Securities and Exchange Commission. As a result, legal disputes surrounding token classification could decline.
JPMorgan Details Eight Potential Catalysts for the U.S. Crypto Market
JPMorgan outlined eight developments that could support the U.S. crypto market if the bill becomes law. The framework would classify tokens as digital commodities or digital securities. Tokens overseen by the CFTC could face lighter compliance requirements than those regulated by the SEC.
A grandfather clause would allow certain ETF-linked assets, such as XRP, Solana, Litecoin, Hedera, Dogecoin, and Chainlink, to fall under the CFTC regime. According to the analysts, this distinction could materially ease compliance burdens for those assets.
The bill would also introduce a grace period for new projects. These projects could raise up to $75 million annually without full SEC registration while working toward decentralization. JPMorgan said this provision could support venture activity within U.S. markets rather than offshore jurisdictions.
In addition, tokens initially sold as securities could transition into commodity status once sufficiently decentralized. The analysts noted that this pathway could expand secondary trading and allow institutional investors to operate through traditional brokers and established risk frameworks.
Proposed Legislation Can Clarify Crypto Custody and Tokenization Rules
The legislation would further establish clearer rules for crypto intermediaries. It would define registration requirements and custody standards in the U.S. crypto market. Under clearer guidance, institutions such as BNY Mellon and State Street could directly custody digital assets.
Moreover, the bill would promote the tokenization of traditional securities and real-world assets. It clarifies that tokenized instruments remain subject to existing securities laws. Firms, including Intercontinental Exchange and State Street, are already building infrastructure for tokenized markets.
Miners, validators, and software developers would receive exemptions from broker-style reporting during development, provided they do not engage in custodial activity. JPMorgan said this approach could support open-source innovation while maintaining regulatory oversight once systems are deployed.
The bill also establishes exemptions for small-scale crypto payments and stipulates how staking is taxed. These measures, according to analysts, may spur wider adoption of payments and provide better insight into net staking yields.
Lastly, JPMorgan stated that the bill could affect how institutions perceive stablecoins and tokenized deposits. According to analysts, some of the provisions would be a burden on U.S. stablecoins because they are framed as digital cash rather than as investment deposits.