JPMorgan Says CLARITY Act Passage Could Trigger Second Half Crypto Market Rebound

• JPMorgan links crypto recovery to CLARITY Act approval expected by mid year in Congress.

• Senate disputes over stablecoin yield rules continue to delay the CLARITY Act vote.

• The bill would split oversight between SEC and CFTC and define token status.

JPMorgan said digital asset markets may strengthen later this year if Congress passes the pending market structure legislation. The bank tied its outlook to progress on the CLARITY Act in Washington. Analysts believe clearer rules could reduce legal uncertainty that has slowed trading activity. As a result, firms are watching Capitol Hill more closely.

Bullish vibes on the CLARITY Act! JPMorgan does see it as a potential catalyst for a big crypto rally in H2 2026 if passed by mid-year, bringing much-needed regulatory clarity. Quick note: Their report mentions mid-2026, not specifically end of April (that’s more from Ripple’s…

— BitcoinWorld Media (@ItsBitcoinWorld) March 3, 2026

The bank expects the CLARITY Act could pass by mid-year. It sees the bill as a potential catalyst for crypto markets in the second half. Although sentiment remains weak, JPMorgan believes policy clarity could shift momentum. Therefore, legislative timing now shapes market expectations.

Senate Debate Slows Final Vote on CLARITY Act

The House has already approved the CLARITY Act framework. However, the Senate has not scheduled a final vote. Lawmakers remain divided over oversight definitions and compliance standards. These disagreements continue to delay progress.

Senators are debating how the bill should treat stablecoin rewards. Crypto firms want to offer incentives to holders of dollar-linked tokens. In contrast, banking groups oppose yield-style features. They argue such incentives could draw deposits away from traditional banks.

Lawmakers are also reviewing how the bill aligns with the GENIUS Act. President Donald Trump signed that law in July to regulate stablecoin issuance. However, some senators believe it does not resolve broader market structure concerns. As a result, they seek further clarity within the CLARITY Act framework.

Coinbase initially supported the draft legislation. Later, the company withdrew support after the new language addressed stablecoin rewards. Discussions have continued, yet no final agreement has emerged. Consequently, firms remain cautious while negotiations continue.

Another dispute centers on conflict-of-interest provisions. Some lawmakers want to restrict senior officials and their families from certain crypto activities. Supporters say these limits would protect public trust. Still, others question how broadly such restrictions should apply.

CLARITY Act Sets Framework for Token Classification

The CLARITY Act proposes a formal system to classify digital tokens. It divides oversight between the CFTC and the SEC. Regulators would label tokens as digital commodities or digital securities. The classification would depend on defined criteria.

The bill outlines a transition process for new projects. It would allow firms to raise up to $75 million annually while pursuing decentralization targets. Once networks meet those milestones, tokens could shift from securities to commodity status. This change would support broader secondary trading.

The proposal also establishes registration and custody standards for intermediaries. Institutions such as BNY Mellon and State Street could offer digital asset custody under clear rules. In addition, tokenized securities would remain subject to existing securities laws.

Lawmakers included exemptions for miners, validators, and software developers during non-custodial phases. The bill also introduces small transaction tax exemptions for routine payments. Moreover, it clarifies how staking rewards should be treated for tax purposes.