Jefferies, a Wall Street investment bank, said maturing blockchain infrastructure and incremental regulatory progress are laying the groundwork for a new wave of tokenization by institutions in traditional finance (TradFi). However, widespread adoption depends on having clear rules on the structure of the US market, he said.
The bank pointed to the Digital Asset Market Clarity Bill as the most detailed plan yet for how blockchain-based financial infrastructure could develop, even though obstacles remain in its path.
“While approval remains uncertain, implications for financial institutions, blockchain natives and tokens may emerge sooner than anticipated,” 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 cryptocurrency market structure from Tuesday to Thursday, citing the winter storm that hit much of the US over the weekend.
Analysts noted that the Senate Banking Committee released its version of the CLARITY Act on Jan. 12, building on the House bill passed last July. Industry reaction has been largely positive, the report said, but political hurdles remain after a planned profit margin was postponed amid industry pushback.
A separate Senate Agriculture Committee bill still needs to be reconciled, and final approval requires a full Senate vote and presidential approval. The report highlighted that in the Polymarket prediction market the probabilities of approval in 2026 have decreased drastically.
According to the bank’s analysts, the bill would mark a break from “regulation by enforcement,” and would instead aim to harmonize agency oversight through a technology-neutral framework covering asset classification, regulatory jurisdiction, activities of financial institutions, supervision of decentralized finance (DeFi), tokenization, and consumer protection.
Stablecoins have attracted enormous attention. Analysts said the Senate bill would close the so-called “stablecoin performance loophole” by banning rewards paid solely for holding stablecoins, while allowing transaction-based incentives.
Jefferies argued that CLARITY’s biggest impact would be to unlock broader participation from regulated financial institutions. Tokenization efforts are already accelerating, he said, citing initiatives from the NYSE, Nasdaq, DTCC and Swift.
Clear market structure rules could accelerate blockchain-based trading, lending and custody, shift capital toward TradFi-led projects, and strengthen regulatory moats for compliant crypto-native companies, he said.
Many of these initiatives will rely on specific blockchains for settlement, creating potential advantages for tokens tied to revenue-generating network activity, the report adds.
Benchmark, a broker, said the absence of legislation would postpone, rather than undermine, the maturation of cryptocurrencies, limiting the US market as capital flows towards bitcoin-linked exposure, balance sheet strength and cash flow infrastructure, and away from regulation-sensitive segments, including exchanges, DeFi and altcoins.
Read more: Delay in Market Structure Bill Considered Limiting Crypto Valuations in US, Benchmark Says
