JPMorgan Analysts Say CLARITY Act Unlikely to Pass in 2026

The long wait for comprehensive crypto market rules in the United States may stretch well beyond this year, according to analysts at JPMorgan. In commentary highlighted in a weekly industry rollup for the week of October 26, 2026, the bank’s analysts concluded that the CLARITY Act is unlikely to become law in 2026. Their assessment lands at a moment when hopes for a landmark bill have faded, and when regulators have been left to fill gaps with their own rules and guidance instead of a single statute passed by Congress.

The CLARITY Act has been widely viewed as the most serious attempt yet to give digital assets a clear legal home in the American financial system. For years, crypto companies, investors, and even many regulators have complained that the existing rulebook was written for stocks, commodities, and banks, not for tokens that can behave like several of those things at once. The bill was meant to answer the basic question that has shaped almost every enforcement action, court case, and compliance debate in the sector: which tokens fall under securities law, which fall under commodities law, and which regulator should take the lead. Without that answer in statute, firms have had to build businesses on interpretations, enforcement patterns, and legal advice that can shift with each new administration.

JPMorgan’s analysts did not argue that nothing is happening. They acknowledged that regulators have taken steps in recent months that move the framework forward. But they added a crucial qualification: those actions only partly offset the failure of legislation to pass. In their view, only a law passed by Congress would make the framework more durable. Agency rules can be revised, withdrawn, or challenged in court far more easily than a statute, and they often depend on the priorities of whoever leads an agency at a given moment. That distinction matters for companies deciding whether to launch products, raise capital, or expand in the United States, because durability is often just as important as the content of any single rule.

What the CLARITY Act Would Settle for Crypto Markets

At its core, the CLARITY Act is a market-structure bill. It is not primarily about whether crypto should exist, or about setting prices, or about endorsing any particular token. It is about drawing jurisdictional lines so that market participants know which regulator to answer to, what disclosures to make, and what kind of licence or registration they need. In general terms, that means clarifying how tokens are classified, how trading platforms should be supervised, and how the responsibilities of the main financial regulators should be divided. For an industry that has operated for years in a grey zone, that kind of clarity would reduce the legal risk that now hangs over almost every listing decision, custody arrangement, and token launch.

The stakes are practical rather than abstract. When classification is uncertain, an exchange cannot be sure whether listing a new token exposes it to enforcement. A developer cannot be sure whether distributing a token counts as offering a security. A bank cannot be sure whether holding or servicing crypto assets for clients will draw criticism from its supervisor. Investors, meanwhile, cannot be sure what protections apply if something goes wrong. Legislation would not remove all risk from a volatile market, but it would replace a patchwork of speeches, enforcement actions, and court rulings with a set of rules that firms could plan around. That is why market-structure legislation has been treated by many in the industry as more consequential than any single product approval or enforcement settlement.

Why the 49-50 Senate Vote Matters for the CLARITY Act

The bill’s path through Congress illustrates why analysts have grown pessimistic about its chances this year. The CLARITY Act stalled in the Senate after a cloture vote on September 15 ended 49-50. Cloture is the procedural step needed to advance most legislation past debate in the Senate, and it normally requires 60 votes. Falling short by eleven votes is not a narrow miss that a small compromise might fix; it signals a substantial gap between supporters and the threshold needed to move forward. A bill that cannot clear cloture cannot reach a final vote, no matter how much support it might have in the House or among industry groups.

That arithmetic also explains why timing matters so much. Congress is now in recess until after the November 3 midterm elections, which means there is no legislative window in which to renegotiate, amend, and re-vote on the bill before voters go to the polls. Even if negotiators were working behind the scenes, they cannot advance the bill while Congress is away. And once members return after an election, the political incentives shift. Lawmakers who have just faced voters may be less willing to take up a complex and contested financial bill in the remaining weeks of the session, especially if the balance of power has changed or if leadership priorities have moved elsewhere.

What the Post-Midterm Calendar Means for US Crypto Regulation

With Congress in recess until after November 3, the realistic calendar for the CLARITY Act now points into 2027 at the earliest, and even that is not guaranteed. A new Congress, or a reshuffled set of committee leaders, would need time to reintroduce or revive the bill, hold hearings, negotiate amendments, and rebuild a coalition of 60 Senate votes. That process rarely happens quickly for major financial legislation, and it competes with budgets, nominations, and other priorities that typically dominate the early months of a session. JPMorgan’s assessment that passage in 2026 is unlikely therefore reflects not only the September vote but also the simple fact that the clock has run out for this year.

For the market, the post-midterm period is likely to be defined less by a single legislative breakthrough and more by incremental steps. Regulators will continue to write rules within their existing authority, courts will continue to decide cases that clarify the law piece by piece, and states may continue to experiment with their own licensing and consumer-protection regimes. That activity can be meaningful, and in some areas it may give firms enough confidence to proceed, but it will remain fragmented. A company operating nationally may still face different expectations in different jurisdictions, and a token’s legal status may still depend on facts and circumstances rather than a clear statutory test.

How Agency Rules Partly Fill the Gap Left by Congress

The recent actions of regulators show both the promise and the limits of the agency-led route. The same weekly rollup that carried the JPMorgan assessment noted that the Office of the Comptroller of the Currency became the first United States regulator to finalise rules under the GENIUS Act for stablecoin issuers. Those rules are effective from January 18, 2027. Issuers still cannot pay interest, but the OCC dropped a proposed presumption against rewards paid through third parties, a change that drew criticism from the American Bankers Association. The episode is a useful illustration of what agency rulemaking can and cannot do: it can implement a law Congress has already passed, in this case for stablecoins, but it cannot create the broader market-structure framework that the CLARITY Act was meant to provide.

That distinction is central to the analysts’ argument that agency action only partly offsets legislative failure. The GENIUS Act gave regulators a specific mandate for stablecoins, so the OCC could act within that mandate. No equivalent mandate exists for the wider questions of token classification and exchange oversight, so regulators there must stretch older statutes to fit new technology. That approach can produce useful guidance, but it is more vulnerable to legal challenge and to reversal when leadership changes. It also tends to proceed agency by agency, which can leave gaps or overlaps that a single statute would have resolved.

Frequently Asked Questions

What is the CLARITY Act?

The CLARITY Act is proposed United States market-structure legislation for digital assets. In general terms, it aims to clarify which regulator oversees which kinds of tokens and trading activity, so that firms and investors have a clearer legal framework than the current patchwork of enforcement actions and interpretations. It is distinct from stablecoin legislation, which deals specifically with dollar-backed tokens.

Why do JPMorgan analysts think it will not pass in 2026?

Analysts cited in the weekly rollup pointed to the bill stalling in the Senate after a 49-50 cloture vote on September 15, well short of the 60 votes needed to advance. With Congress in recess until after the November 3 midterm elections, there is no remaining window this year to renegotiate and pass the bill, making passage in 2026 unlikely in their assessment.

Can regulators replace Congress on crypto market structure?

Regulators can make progress within their existing authority, and they have done so, including the OCC finalising GENIUS Act rules for stablecoin issuers. But analysts argue that agency action only partly offsets the lack of legislation, because agency rules are easier to revise or challenge than a statute and cannot by themselves settle the broader classification and oversight questions that market-structure legislation would answer.

What happens next for US crypto regulation?

The debate is expected to continue after the midterms, with regulators, courts, and state authorities shaping the framework piece by piece. A revived or revised market-structure bill could return in a future session, but it would need to rebuild a 60-vote Senate coalition, which takes time and political agreement on contested issues such as consumer protection and regulatory jurisdiction.

Source: Caleb & Brown

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