The passage of the US Clarity Act, which defines the crypto market structure, faces the risk of derailment this year. JPMorgan analysts warn that the window of opportunity is closing due to a tight legislative schedule ahead of the midterm elections. Despite passing the Senate Banking Committee in May, the bill still requires a full Senate vote, reconciliation with the House version, and the President's signature.

The primary sticking point is the issue of stablecoin yield. The banking lobby is demanding a strict ban on "passive" interest paid on balances to protect traditional deposits from unregulated competition, while the crypto industry advocates for flexibility. The current draft attempts to distinguish between passive income and activity-based rewards but remains ambiguous, posing significant political risks to its further progression.

The Clarity Act is critical for the industry as it aims to definitively delineate the jurisdictions of the SEC and CFTC, replacing enforcement-based regulation with clear rules. If lawmakers ultimately impose strict restrictions on passive stablecoin yield, JPMorgan expects a massive shift of free crypto capital into tokenized treasuries and digital money market funds. Meanwhile, the final text of the law could change significantly depending on whether a compromise is reached before or after the elections.