Jefferies, a Wall Street investment bank, said mature blockchain infrastructure and incremental regulatory advancements lay the foundation for a new wave of tokenization by traditional finance (TradFi) institutions. However, broad adoption depends on clear rules regarding the structure of the U.S. market, he added.
The bank highlighted the proposed Digital Asset Market Clarity Act as the most detailed plan yet for how blockchain-based financial infrastructure could develop, although obstacles remain in its path.
“While adoption remains uncertain, implications at the financial institution, blockchain, and token levels may emerge sooner than expected,” analysts led by Andrew Moss wrote in Sunday’s report.
Tokenization is the process by which real-world assets are converted into blockchain-based tokens.
The Senate Agriculture Committee postponed its hearing on marking up crypto market structure from Tuesday to Thursday, citing the winter storm that hit much of the United States over the weekend.
Analysts noted that the Senate Banking Committee released its version of the CLARITY Act on Jan. 12, building on the bill passed by the House last July. Industry response has been largely positive, the report says, but political hurdles remain after a planned increase was postponed due to industry reluctance.
A separate bill from the Senate Agriculture Committee still needs to be reconciled, and final approval requires a full Senate vote and the president’s approval. The report highlights that on the Polymarket prediction market, the chances of passage to 2026 have fallen sharply.
According to the bank’s analysts, the bill would mark a departure from “regulation by enforcement”, aiming instead to harmonize agency oversight through a technology-neutral framework covering asset classification, regulatory jurisdiction, financial institution activities, decentralized finance (DeFi) oversight, tokenization and consumer protection.
Stablecoins have attracted considerable attention. Analysts said the Senate plan would close the so-called “stablecoin yield gap” by banning rewards paid solely for holding stablecoins, while allowing transaction-based incentives.
Jefferies argued that the most significant impact of CLARITY would be to enable broader participation by regulated financial institutions. Tokenization efforts are already accelerating, he said, citing initiatives from the NYSE, Nasdaq, DTCC and Swift.
Clear rules on market structure could accelerate blockchain-based trading, lending and custody, shift capital to TradFi-led projects and strengthen regulatory moats for compliant crypto-native businesses, he said.
Many of these initiatives will rely on specific blockchains for settlement, creating upside potential for tokens tied to revenue-generating network activity, the report adds.
Benchmark, a broker, said the lack of legislation would delay, rather than undermine, the maturation of crypto, limiting the U.S. market as capital flows flow toward bitcoin-related exposure, balance sheet strength and cash flow infrastructure, and away from regulation-sensitive segments including exchanges, DeFi and altcoins.
Learn more: Market Structure Bill Delay Appears to Cap US Crypto Valuations, Benchmark Says
