Momentum is building in Washington for the long-awaited CLARITY Act, with JPMorgan pointing to signs that negotiations may be nearing a breakthrough. In a Wednesday report, the banking giant stated that discussions among lawmakers and regulators suggest the legislation is close to completion, with only a small number of issues still unresolved.
Senator Thom Tillis confirmed ongoing discussions on Capitol Hill, noting that lawmakers are still "going back and forth" with stakeholders on key provisions, particularly around stablecoin yield language. He added that the timing for releasing the final text remains uncertain but expressed being "guardedly optimistic" about scheduling a markup soon. The Senate Banking Committee's latest schedule, released by Chair Tim Scott, did not include the CLARITY Act, raising concerns about delays. However, policy experts like Justin Slaughter of Paradigm indicate the timeline remains flexible, with real legislative pressure beginning after Memorial Day, giving lawmakers several weeks to advance the bill.
A senior policy official noted that the list of contentious items has narrowed from roughly a dozen to just "2–3 issues," while debate around stablecoin rewards is now "in a good place." The CLARITY Act is designed to define how digital assets are regulated in the U.S., including the division of oversight between the SEC and CFTC, and addresses the treatment of stablecoins and decentralized finance platforms.
One of the most closely watched debates centers on whether stablecoin issuers should be allowed to offer yield-like rewards to users, a feature that has drawn pushback from banks. JPMorgan's report suggests the latest proposals could find support from both crypto firms and traditional financial institutions. A Senate staffer familiar with the process said the draft legislation is "very close," with remaining questions around areas like DeFi oversight and token classification potentially resolved in the near term.
However, the path forward carries risks. The final legislative text has yet to be released, and no formal vote has been scheduled. Timing is a critical factor, with some experts warning that delays could push the bill into a more uncertain political environment, especially with the 2026 midterm elections approaching. JPMorgan noted that if Democrats regain control of the House, crypto legislation could lose priority.
Adding a new dimension to the process, the financial disclosure of Kevin Warsh—a former Federal Reserve governor nominated for a key role—has drawn attention. His portfolio, which holds over $100 million in assets, includes early-stage investments in crypto-related firms like Compound, dYdX, Solana, Optimism, and Blast, potentially raising questions about conflicts during his confirmation hearing.
Despite the complexities, the direction appears clear. As one policy advisor stated, "there is no such thing as a perfect bill," underscoring a willingness among stakeholders to compromise 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.
