JPMorgan has cautioned Senate lawmakers that moving too quickly on the Digital Asset Market Clarity Act could create new gaps in financial oversight, allowing tokenized products and stablecoins to shift risk into less-supervised markets.
Umar Farooq and Peter Muriungi, global co-head of payments and chief executive officer of Digital Assets and Blockchain Solutions at JPMorgan respectively, stated in their warning: “When guardrails are weak or unclear, risk doesn’t disappear. It shifts and concentrates.”
The CLARITY Act, which would divide federal oversight of digital assets between the SEC and CFTC, passed the Senate Banking Committee in May with a 15-9 vote. Senate Majority Leader John Thune and Banking Committee Chairman Tim Scott are pushing for a floor vote before the August recess, with formal Senate consideration potentially beginning the week of July 13 and possible floor action occurring the week of July 20.
JPMorgan’s position reflects broader tension within the regulatory push. The bank argues digital assets should be regulated based on their function rather than the technology underlying them. The firm operates Kinexys by J.P. Morgan, a blockchain business, and JPM Coin, a deposit token for institutional settlement.
Senate Democrats are introducing complications by seeking restrictions on cryptocurrency business activity by public officials and their families, including the president. This ethics dimension has not been formally resolved as lawmakers race toward a July vote.
The timeline is tightening. The House Financial Services Committee scheduled a field hearing in New York for July 17. The House is expected to leave for August recess on July 24, compressing the window for any parallel action.
Jake Chervinsky, CEO of the Hyperliquid Policy Center, outlined the legislative bind: “The challenge is that there likely won’t be a clear ‘yes’ without putting the bill on the floor for a vote, but it’s hard to justify using limited floor time on a bill that might not pass.”
That uncertainty reflects recent shifts in momentum. Galaxy Digital, a digital asset firm, recently cut its estimate of CLARITY Act passage odds to 50% in 2026, citing a shrinking Senate calendar and unresolved policy disputes. The estimate also reflects broader GOP confidence concerns after President Donald Trump recently refused to sign a housing bill negotiated by his own administration.
Crypto industry supporters believe they can advance legislation despite bank opposition. Jaret Seiberg, an analyst at TD Cowen, reports that crypto advocates do not expect major changes to stablecoin yield provisions, a key point of contention with JPMorgan.
The CLARITY Act has become a top priority for the crypto industry after years of enforcement actions and regulatory disputes. Passage would require 60 votes in the Senate, a threshold that depends on maintaining Republican unity and potentially securing Democratic support on a bill that also carries ethics and policy disagreements.
