JPMorgan (NYSE:JPM) warns that fading CLARITY Act odds are a setback for crypto markets since further delays give traditional finance infrastructure a bigger head start over public crypto networks.

JPMorgan’s Warning: This Is Not Just About a Delayed Vote

JPMorgan analysts led by Nikolaos Panigirtzoglou put CLARITY Act passage odds at just 37%, according to a Wednesday report cited by CoinDesk.

The Senate is heading into summer recess with four issues still unresolved: ethics provisions, stablecoin yield, DeFi rules, and anti-money laundering requirements.

“The longer the approval of the Clarity Act is postponed, the greater the threat to crypto markets from the growth of tokenization and blockchain-based applications eventually being absorbed by incumbent market infrastructure rather than accruing to public crypto networks,” the analysts wrote.

The bank said the legislation would encourage institutional investment, boost US-regulated trading, and lower barriers for banks, exchanges, custodians, and market makers. 

Some of that momentum is already building regardless, with Citadel Securities’ $400 million investment in Crypto.com and the CFTC approving the first US-regulated perpetual crypto futures contracts cited as examples.

Moreover, JPMorgan warned that provisions allowing some tokenized securities and derivatives to trade outside SEC or CFTC oversight could deter the institutional participation the bill aims to attract.

Where the Negotiations Actually Stand

Senators Thom Tillis (R-NC) and Ruben Gallego (D-AZ) finalized a new ethics compromise, though the specific language has not emerged publicly. 

The revised text still needs White House approval and enough Democratic buy-in to clear 60 votes.

Meanwhile, Senator Cynthia Lummis (R-WY) expressed frustration on X Wednesday. “After nearly 11 months of giving almost everything asked of us, I genuinely don’t know what else my Democrat colleagues need before we act,” she wrote.

The Senate heads into recess next week. If the bill does not clear cloture before then, September becomes the next realistic window, and a failed September vote likely pushes it past the midterms entirely.

Read Also: Trump Says He’s ‘For’ Crypto, But It’s Not Personal Since Kids Handle Investments and He Avoids Any Talk About It — ‘This Office Is a Much Higher Calling’

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