Clarity Act Could Give Banks, Brokers, and Asset Managers Confidence to Launch More Crypto Products in the US
JPMorgan has said that delays in the Clarity Act are slowing the crypto market in the United States. The bank believes the lack of clear rules is stopping many large financial companies from increasing their crypto investments. Bitcoin traded around $64,650 on July 30 while the market continued to move in a narrow range.
The warning came after the US Senate delayed work on the Clarity Act before its summer recess. Prediction markets now give the bill only a 37% chance of becoming law this year. JPMorgan said the delay has reduced confidence across the crypto industry and slowed institutional adoption.
The Clarity Act aims to create clear rules for digital assets by dividing oversight between the US Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). The bill would also provide a clearer path for exchanges, brokers, banks, and asset managers to offer crypto-related products.
JPMorgan analyst Nikolaos Panigirtzoglou said, “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 bank believes clear regulations could encourage more financial firms to enter the crypto market. At the same time, JPMorgan said some parts of the current bill may still raise concerns for institutional investors.
Investment bank Jefferies also believes the legislation still faces several political challenges. Congress will soon begin its August recess, and the upcoming midterm elections could slow the process even more.
JPMorgan said the Clarity Act remains one of the biggest factors for the future of the crypto market. Until lawmakers approve the bill, many large investors may continue to wait before expanding their crypto exposure.
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