The “CLARITY Act,” considered one of the most important steps taken by the US regarding cryptocurrency, has still not been passed.
While the Clarity Act faces significant delays, JP Morgan predicts it could be approved by mid-year.
According to The Block, JPMorgan stated that CLARITY could be approved by mid-year and that its passage could contribute to a cryptocurrency recovery in the second half of the year.
In a recent report, analysts led by JPMorgan analyst Nikolaos Panigirtzoglou stated, “While the overall sentiment in cryptocurrency markets remains negative, we expect the market structure regulation CLARITY to be approved in mid-year. This approval could act as a positive catalyst for cryptocurrency markets in the second half of the year.”
As is known, the CLARITY bill aims to create a comprehensive regulatory framework for cryptocurrencies in the US. However, although the bill has made progress in the House of Representatives, Senate negotiations have stalled.
Two issues are currently delaying the bill: “Whether interest will be allowed on stablecoins and whether cryptocurrency-related activities will be restricted for high-ranking public officials and their families.”
While cryptocurrency companies want to offer rewards/interest to users holding stablecoins, banks argue that allowing earnings from stablecoin balances could drive deposits away from the traditional banking system and create financial stability risks.
On another issue, US Democrats are pushing for restrictions that would prevent high-ranking government officials, including President Donald Trump, and their families from engaging in certain crypto-related financial activities.
*This is not investment advice.
