Momentum is building in Washington for the long-awaited CLARITY Act, with JPMorgan ( JPM ) pointing to signs that negotiations may be nearing a breakthrough.
JPMorgan said discussions among lawmakers and regulators suggest the legislation is close to being done, with only a small number of issues still unresolved in a Wednesday report.
A senior political official noted that the list of contentious issues has narrowed from about a dozen to just “2-3 issues,” while the debate over stablecoin rewards is now “in a good place.”
The CLARITY Act is designed to define how digital assets are regulated in the United States, including how oversight is divided between agencies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). It also addresses how stablecoins and decentralized finance platforms should be treated under existing financial regulations.
Lawmakers involved in the discussions struck an upbeat tone. A Senate staffer familiar with the process said the draft legislation is “very close,” with remaining questions around areas such as DeFi oversight and token classification potentially resolved in the near term, according to the report.
One of the most watched debates is whether stablecoin issuers should be allowed to offer return-like rewards to users. The issue has drawn backlash from banks, which argue that such features could replicate deposit withdrawals without the same regulatory safeguards.
The latest proposals could find support from both crypto firms and traditional financial institutions, according to JPMorgan.
Still, the way forward is not without risk. The final text of the law has not yet been released, and no formal vote is scheduled. Timing is also a factor, with some policy experts warning that delays could push the bill into a more uncertain political environment.
JPMorgan noted that the outlook for the 2026 midterm elections remains mixed, with expectations that Democrats could regain control of the House of Representatives. If that scenario plays out, crypto legislation could lose priority, potentially slowing further progress.
So far, the direction of travel seems clear. As one policy advisor put it, “there is no such thing as a perfect bill,” underscoring the willingness of stakeholders to compromise in order to establish a workable framework.
If passed, the CLARITY Act would mark a major step toward integrating digital assets into the U.S. financial system and provide regulations that industry participants have sought for years.
